Foundation Economics

A bottom-up framework to rebuild broad prosperity by rewarding work, decentralizing market power, and anchoring family stability.

Executive Summary

Foundation Economics restores a simple deal: markets can be dynamic and innovative, so long as wealth can’t pile up endlessly at the top, wages keep up with productivity, and families can actually afford the basics. The policy mix uses very high marginal tax rates on ultra-high incomes and concentrated profits to push excess capital back into productive use, while pairing that with powerful, automatic tax credits that make living-wage jobs the best deal in town. Core family costs—especially childcare—are fully covered at modest incomes so parents can work, save, and thrive.

I. Foundation against Extreme Concentration

Goal: Create a strong downward force on over-accumulation without touching the middle class.

A. Top Marginal Income Rate (Individuals & Families)

• 94% marginal rate on taxable income above $200,000 for single filers and above $400,000 for married filing jointly.

• Everything below those thresholds remains under existing progressive brackets (which Congress can simplify), so ordinary earners are unaffected.

• The 94% rate acts as a cap on runaway marginal gains—not a retroactive tax on total income.

B. Rental Income Alignment

• Net rental income is treated as ordinary wage income for bracket purposes with no preferential rates.

• For anti-avoidance, look-through rules aggregate rental income from pass-throughs, trusts, and shell entities to the beneficial owner.

• Result: A landlord with rental income exceeding $200,000 (single) faces the 94% top marginal rate on the portion above the threshold.

C. Corporate/Business Anti-Consolidation Tiers

• Tiered corporate rate schedule that climbs steeply for very large, concentrated profits:

a) Standard progressive corporate rates up to $1,000,000 in profits.

b)  Above $1,000,000: rates enter 70%+ marginal tiers that step higher   with profit bands, discouraging consolidation and monopoly scale purely for financial extraction.

• Group aggregation rules (common control, shared ownership, significant influence) prevent firms from splitting to dodge the tiers.

• Expensing and R&D: preserve deductions that reflect true productive investment, not financial engineering.

II. Foundation of Wage-First Growth
Goal: Make it irrational not to pay living wages.

A. Living-Wage Employer Credits (Automatic, Monthly)

• Per-worker, refundable payroll tax credit for jobs paying at least $25/hour (indexed to median wages) or $72,800/year for salaried roles.

• Credit phases up between $20 → $25/hr to help smaller employers climb the ladder; full credit at $25+.

• Monthly advance via payroll filings so small businesses get cash-flow support now, not next April.

• Bonuses for: employer-paid benefits (health, retirement match), predictable scheduling, and apprenticeships.

B. Regional & Small-Biz Sensitivity

• Allow a supplemental bump for firms under 50 employees and for high-cost counties, keeping mom-and-pop shops competitive with big chains.

C. No Credit for Union-Busting or Misclassification

• Access to the credit requires clean labor practices (no illegal retaliation) and proper worker classification. Gig misclassification forfeits credits.

III. Family Foundations
Goal: Eliminate the childcare paywall so parents can work.

A. Childcare: 100% Subsidized at Modest Incomes

• Individuals earning < $52,000 and families earning < $70,000 receive 100% childcare coverage (state + federal dollars).

• Benefits delivered as direct pay to licensed providers or vouchers parents can use with approved providers.

• Sliding scale above those thresholds to avoid cliffs; index annually.

B. Supply-Side Boost

• Startup grants and loan guarantees to expand licensed childcare seats, especially in “childcare deserts.”

• Wage add-ons for childcare workers tied to training and credentials to stabilize staffing.

How the Pieces Work Together

• High marginal rates at the top + corporate tiers create a ceiling on extractive gains and consolidation.

• Wage credits and childcare coverage create a floor under families and a strong incentive for employers to raise pay.

• Result: Profits are steered toward real investment and payroll, not accumulation for its own sake; households gain income and time; small businesses can compete.

Implementation Details & Safeguards

• Marginal, not retroactive: All headline rates apply only to the next dollar above thresholds.

• Anti-avoidance:

  • Look-through for pass-throughs, trusts, foundations, and private equity structures.

  • Common-control aggregation so corporate tiers can’t be gamed by splitting entities.

  • Global intangible low-tax income (GILTI) hardening and minimum taxes to block profit-shifting.

• Indexation: Thresholds adjust annually to wage growth/median income.

• Phase-ins: Multi-year ramp (e.g., +10 percentage points per year) to allow planning and contract repricing.

• Sunset & Review: Statutory 5-year review of revenue, wages, prices, competition metrics, and childcare access.

Quick Scenarios (plain-English)

• Teacher making $49,000 with two kids: 100% childcare paid; keeps more take-home; qualifies for child tax credits as under current law.

• Retailer paying $23/hr: Partial payroll credit; moving to $25/hr unlocks full credit—raising wages pays for itself.

• Landlord netting $250,000 (single): $50,000 above the $200,000 threshold is taxed at 94% marginally; strong incentive to reinvest, expand affordable units, or lower rents.

• Local café (15 employees) in a high-cost area paying $25/hr: Full wage credit + small-biz bump help them compete with national chains.

Answers to Likely Questions

--“94% sounds huge—is that on all income?”
No—only the dollars above the threshold. Everything below is taxed at normal progressive rates.

--“Won’t the rich just avoid it?”
That’s why the plan aggregates entities under common control, applies look-through rules, and hardens the international minimum tax. If you earn or control the income, it finds you.

--“Will businesses stop investing?”
The opposite is incentivized. High marginal rates on excess profits make hoarding less attractive, while expensing, R&D, and wage credits make real investment and payroll more attractive.

--“What about inflation?”
This is not demand sugar. It rebalances income toward workers while curbing monopoly pricing power via anti-consolidation tiers. Greater competition + childcare supply expansion helps ease price pressures.

--“Is this anti-growth?”
It’s anti-extraction, pro-productivity. By tying credits to training, benefits, and full-time work, we lift skills, retention, and output.