The Economy & Working Families

What it does: A three-part restructuring of the federal tax code that delivers immediate financial relief to the bottom 90% of earners while generating new revenue from the mechanisms the ultra-wealthy and Fortune 500 corporations use to avoid taxation.

Phase 1: Direct Relief: Households earning under $50,000 owe no federal income tax, through a new Zero-Tax Floor credit that cancels their federal income tax. The credit phases out gradually between $50,000 and $75,000 for single filers and heads of household, and between $50,000 and $100,000 for married couples, so no one faces a cliff where earning one more dollar costs thousands. The first $12,000 of every worker’s earned income is exempted from the FICA payroll tax (7.65%), delivering an immediate, visible boost to every paycheck — roughly $918 a year for every worker. The exemption is full for workers earning up to $75,000 and phases out between $75,000 and $125,000, so it goes to working families rather than six-figure earners. For standard W-2 employees with simple financial situations, the IRS pre-fills tax returns using data the government already possesses on citizens to review, sign, and submit for free.

Phase 2: High-End Revenue: Long-term capital gains and dividends are taxed at the ordinary income rate for households earning over $1 million annually; the bottom 99% keep their current favorable investment tax rates. A strict 15% to 20% minimum tax is imposed on the book income of corporations with revenues over $1 billion; the profits they report to shareholders, not the accounting fiction they report to the IRS. The stepped-up basis loophole is eliminated: when the ultra-wealthy pass away, the untaxed gains on their lifetime investments are taxed before transfer to heirs, generating hundreds of billions in revenue over a decade without affecting the middle class.

Phase 3: Closing the Tax Gap: The U.S. government loses an estimated $600 billion or more every year to the tax gap; taxes legally owed but unpaid, largely through complex offshore accounts and tiered partnerships. Full funding of IRS technology modernization and audit resources focused almost exclusively on corporations and the top 0.1% yields massive return on investment. This shrinks the deficit by collecting taxes already legally owed, without writing a single new tax law.

Net effect: Every household under $50,000 pays zero federal income tax, including the single workers and two-earner families who still owe tax today. Every worker earning under $125,000 sees a larger paycheck from the FICA exemption. Revenue is replaced through capital gains equalization, corporate minimum taxation, stepped-up basis repeal, and aggressive enforcement of existing law.

Cost

Using the conservative figures in the Sovereign Ledger: corporate minimum tax $11–15B annually; capital gains equalization and stepped-up basis repeal $55–114B; tax gap enforcement $6–15B; executive compensation deduction cap $2–3B. A 0.01% financial transaction tax on stock and bond trades raises an estimated $30–34B, in line with the Congressional Budget Office’s estimate of about $297B over 2025–2034 for the same rate. Taxing carried interest as ordinary income adds about $1.5B. Total new revenue from this policy: $105–182B per year. The full revenue picture, including Policies 2.2 and 2.3, appears in the Sovereign Ledger.

Timeline

Legislation introduced Month 4; FICA exemption and return-free filing effective Year 1. Zero-Tax Floor credit phased in Year 2. Capital gains equalization and corporate minimum tax fully implemented by Year 3. IRS modernization funded from Day 1 with full audit capacity operational by Year 4.

Bottom line: If you earn under $50,000, your federal income tax drops to zero. Every worker earning up to $75,000 keeps more of each paycheck. The revenue comes from corporate minimum taxes, capital gains equalization for millionaires, and collecting taxes already legally owed.

What it does: Guarantees the long-term mathematical solvency of Social Security and Medicare by shifting the funding burden from working-class paychecks to high-end salaries, business distributions, and corporate profits — without cutting a single benefit.

The Social Security Fix: Scrapping the Cap: Currently, the Social Security payroll tax (6.2% employee, 6.2% employer) only applies up to $184,500 (adjusted annually) in wage income. A worker earning $50,000 pays the tax on 100% of their income, while a CEO earning $5 million pays it on less than 4%. This plan implements a ‘Donut Hole’ strategy: the tax remains capped at the standard limit so the upper-middle class is not hit with a sudden increase, but the 6.2% tax resumes on all wage earnings over $400,000. By taxing multi-million-dollar executive salaries that currently escape the system, the plan backfills the revenue lost by exempting the first $12,000 for the working class. On its own it roughly pays for that exemption; it does not close Social Security’s long-term gap. That is the job of the Solvency Commission below.

The Medicare Fix — Closing the “Pass-Through” Loophole: Many high-earning professionals structure their businesses as S-Corporations, paying themselves a modest salary (subject to Medicare tax) while taking the bulk of their profits as “business distributions” that bypass the Medicare payroll tax entirely. This plan institutes a “Substance Over Form” rule: for households earning over $400,000, all active pass-through business income is subjected to the standard Medicare tax, regardless of whether it is labeled a wage or a distribution. This closes a leak that costs the Medicare Trust Fund tens of billions annually. To prevent wealthy business owners from shifting to “fringe benefits” (company cars, private travel, executive perks), a hard automated cap treats any corporate expenditure on executive lifestyle benefits as standard W-2 income for the executive who consumed it.

The Investment Income Backstop: The existing Net Investment Income Tax (NIIT) surcharge on high-earner investment profits is expanded and permanently earmarked for the Medicare Hospital Insurance (Part A) Trust Fund. Medicare is effectively subsidized by Wall Street profits rather than Main Street wages. If any gap remains between what payroll taxes collect and what retirees are owed, the plan legally authorizes the Treasury to use surplus revenue from the Corporate Minimum Tax to backstop the trust funds.

The Social Security Solvency Commission: The retirement trust fund is projected to run short in the early 2030s, after which current law would cut every beneficiary’s check automatically. A 12-member bipartisan commission, split evenly between the parties and advised by independent actuaries, has one year to propose a full solvency package that keeps this platform’s commitment of no benefit cuts and spells out who pays what. Congress then gives the package a single up-or-down vote with no amendments, the same method that let Congress close military bases in the BRAC rounds after years of gridlock.

The Fiscal Stability Mandate: The same commission receives a second charge: a ten-year plan that keeps federal debt from growing faster than the economy. CBO projects a $1.9 trillion deficit for FY2026, 5.8% of GDP, with interest costs near $1 trillion a year. Balancing that through taxes alone would take roughly a 16-point increase in every income tax bracket, so the plan must combine revenue, spending restraint and growth. Its package receives the same single up-or-down vote in Congress.

Cost

Net revenue positive. The Donut Hole alone generates an estimated $80–120B annually. The S-Corporation fix recovers an estimated $20–40B annually. Combined with the NIIT expansion, new revenue roughly matches the cost of the $12,000 FICA exemption; long-term solvency comes from the Solvency Commission’s package.

Timeline

Legislation introduced alongside the Fair Tax Compact in Month 4–6. Donut Hole and S-Corp rules effective Year 1 (synchronized with FICA exemption). NIIT expansion phased in Year 2. Corporate backstop authorization effective Year 3.

What it does: Shifts the IRS from chasing every new accounting trick to taxing economic reality — meaning if an individual or corporation gains access to purchasing power or profit, it is taxed, regardless of the legal label they put on it. This policy is the structural enforcement layer that makes the Fair Tax Compact and the Solvency Act mathematically durable.

Neutralizing “Buy, Borrow, Die”: Currently, billionaires avoid selling their assets by borrowing against their stock portfolios at low interest rates. Borrowed money is not taxable income, so they access the cash value of their wealth without triggering a tax event. Under the “Collateralized Loan Realization Rule,” any personal loan exceeding $10 million that uses untaxed appreciated assets as collateral is legally classified as a constructive sale. If you borrow $50 million against your untaxed stock portfolio, you pay the capital gains tax on that $50 million immediately. You still get your cash and keep your stock, but extracting the purchasing power triggers the tax. Combined with the repeal of stepped-up basis (Policy 2.1), this closes both the “Borrow” and the “Die” portions of the strategy.

Killing Corporate Profit Shifting: Multinational corporations currently shift profits offshore by transferring ownership of intellectual property to subsidiaries in low-tax countries and charging their U.S. branches “royalties.” Under Destination-Based Sales Apportionment, if a company makes 40% of its global sales to U.S. consumers, the IRS taxes 40% of its global profits — regardless of where their accountants claim the profit was generated. It does not matter if the company says its patents are held in Bermuda; if the product was bought by someone in Texas, that fraction of the global profit is taxed by the United States.

A Full-Rate Minimum Tax on Foreign Profits: Starting in Year 1, the foreign profits of U.S. multinationals are taxed at the full 21% corporate rate, country by country, so profits booked in tax havens can no longer be averaged against profits earned in high-tax countries. This is the treaty-compatible first step; Destination-Based Apportionment builds on it in Years 2–3.

Protecting Innovation — The Reinvestment Safe Harbor: Capital that stays inside a business to build factories, hire workers, or fund R&D remains largely untaxed or subsidized through immediate expensing. The heavy taxation only triggers when the founder or investor extracts that wealth for personal consumption — by selling stock, taking a massive dividend, or borrowing against it. The system says: build as much wealth as you want, and we will not penalize you for building it. The moment you convert that wealth into personal spending power; you pay your share. This protects the startup founders and risk-takers who drive economic growth while taxing the extractors who hoard capital in personal accounts.

Cost

Using the Ledger’s conservative figures: the Collateralized Loan Realization Rule raises $7–10B annually, Destination-Based Apportionment $15–23B, and the full-rate minimum tax on foreign profits $20–30B. Total new revenue: $42–63B annually.

Timeline

Legislation introduced Year 1 alongside IRS modernization funding. Collateralized Loan Realization Rule effective Year 2. Destination-Based Apportionment phased in over Years 2–3 with international treaty coordination. Reinvestment Safe Harbor operational Year 1 to immediately signal that productive capital deployment is protected.

To reward states that modernize their own democracies and to ensure whole-cycle economic stability, a one-time $250 Billion State Renewal Trust is established. Funded entirely by the newly captured revenue from the corporate minimum tax, capital gains equalization, and tax gap enforcement, this trust redistributes capital directly to the states using a tiered structure designed to act as a strategic catalyst for rapid adoption.

By aligning state financial interests with national structural reform, we bypass federal gridlock and empower local communities.

• The Vanguard Allocation (35%): The first 10 states to enact the State Democracy Reform Package (independent redistricting, open primaries, and a legislative stock-trading ban, all within each state’s own authority) receive an asymmetric premium—$8.75 billion per state—to immediately fund infrastructure, education, and local tax relief. This establishes a competitive first-mover advantage, ensuring that state leaders act swiftly to secure the maximum possible investment for their communities rather than delaying action.
• The Majority Allocation (55%): The next 28 states to enact the package receive the standard dividend—approximately $4.9 billion per state. While still a historic financial injection, the substantial funding differential between a Vanguard and a Majority state ensures that momentum remains high and states are intensely motivated to finish their reforms.
• The Baseline Allocation (10%): To ensure no state is financially stranded during the system upgrade, the remaining 12 states divide the final 10%—roughly $2.1 billion per state. This baseline acts as a vital safety net for states whose legislative calendars prevent rapid action. It aligns with our whole-cycle planning doctrine: the system completes its full rotation without leaving any American community unsupported.

The Challenge: A structural system upgrade requires immediate capital, but the revenue generated by closing corporate tax loopholes will compound over a decade. We cannot ask state legislatures to vote on a promise of future revenue; they require guaranteed liquidity the moment they ratify.

The Solution: To ensure the states receive their Vanguard or Majority Allocations immediately upon certification that their reform package is law, the U.S. Treasury will be legally authorized to issue $250 Billion in Sovereignty Transition Bonds.

This functions strictly as federal bridge financing:

• Immediate Liquidity: The states receive their multi-billion-dollar capital injections instantly, allowing them to fund local infrastructure, education, and tax relief on Day One of the new constitutional epoch.
• Ring-Fenced Repayment: Over the subsequent ten years, the newly captured, legally binding revenue streams—specifically the Corporate Minimum Tax, the Collateralized Loan Realization Rule, and destination-based corporate apportionment—will be strictly ring-fenced to service and retire these bonds.

The Economic Reality: These bonds add to federal debt until they are repaid; the ring-fenced revenue is what retires them. We are simply securitizing the projected future yield of a repaired, leak-proof tax code to provide instant operational liquidity to the states today. It is a highly disciplined, whole-cycle financial maneuver that guarantees the states get paid while forcing the federal government to adhere to its new revenue architecture.

What it does: A 25% domestic production tax credit (not a subsidy) for companies that manufacture at least 60% of their product on U.S. soil with U.S. workers across five strategic sectors: semiconductors, pharmaceutical manufacturing, clean energy hardware, advanced materials, and agricultural technology.

Why it helps: Framed as national security policy: a country that cannot manufacture its own computer chips, medicine, or energy infrastructure is strategically vulnerable regardless of financial sector strength.

Cost

Tax credit cost estimated at $30–50B annually, offset by reduced adversarial supply chain dependence and increased domestic tax base.

Timeline

Legislation introduced Year 1. Credits available Year 2.

What it does: Businesses with fewer than 50 employees receive a permanent 50% reduction in federal compliance reporting. The IRS creates a Small Business Simplified Code for businesses under $2M annual revenue. The SBA is restructured into a direct lending agency. Federal antitrust enforcement is strengthened for corporations with 40%+ market share.

Cost

SBA restructuring costs offset by reduced default rates. Compliance simplification reduces IRS processing costs.

Timeline

Simplified Code available Year 2. SBA restructuring phased over Years 1–3.

What it does: Federal spending cannot exceed projected revenue except during: (1) a declared national emergency, (2) active military conflict approved by Congress, or (3) a recession (two consecutive quarters of negative GDP growth). Automatic 2% across-the-board cuts trigger if Congress fails to balance — including military spending. No sacred cows.

Timeline

Amendment introduced Year 2. Includes a temporary stabilization fund to prevent abrupt cuts during economic downturns.

What it does: A German-style National Apprenticeship Corps connecting high school juniors and seniors with paid apprenticeships in skilled trades, healthcare, technology, and advanced manufacturing. Participation counts as both school credit and professional certification. Goal: 500,000 active apprentices by 2031. Student loan repayment capped at 8% of discretionary income with full forgiveness after 15 years.

Skills Pipeline: Employers receive a hiring credit of about $5,000 for each registered apprentice, about $2.5B a year at 500,000 apprentices. High school trade programs are expanded and aligned with the industries the Manufacturing Renaissance Act (2.4) targets, and the new Workforce Pell Grants for short training programs are fixed so more quality programs qualify.

Cost

Federal investment of $5–10B over 4 years in apprenticeship infrastructure and community college partnerships.

Timeline

Program design Year 1. First cohort enrolled Year 2. 500,000 apprentice target by Year 4.

What it does: States and cities that make it legal to build more homes earn a bonus on their federal transportation and infrastructure grants. Qualifying reforms include allowing duplexes, townhomes and small apartment buildings by right near jobs and transit, ending minimum parking requirements, and approving permits on a fixed timeline. Washington mandates nothing: a community that keeps its current rules keeps its current funding, and a community that adds homes earns more.

Why it helps: Housing is the largest monthly cost for most families, and the main reason it is so expensive is that local rules make it illegal to build enough. This uses the same carrot-not-stick approach as the rest of the platform and respects local decisions under Policy 1.4.

Cost

Funded by setting aside a share of existing federal transportation and community development grants as bonuses; no new spending.

Timeline

Legislation introduced Year 1; first bonuses awarded Year 2.

What it does: Three protections for workers whose jobs change because of AI and automation. Wage insurance covers half the difference in pay for up to two years when a displaced worker takes a lower-paying job. Portable benefits accounts for retirement and health follow gig and contract workers from job to job, with every company that pays them contributing. And every worker gets a Lifelong Learning Account, funded by a modest employer contribution and usable at any accredited training program or apprenticeship. Wage insurance also covers workers who lose their jobs to import competition, replacing Trade Adjustment Assistance, which lapsed in 2022.

Why it helps: AI will raise productivity, but the gains and the job losses will not land on the same people. Wage insurance pays people to get back to work quickly instead of waiting on unemployment, and portable benefits match how millions of Americans already work.

Cost

Wage insurance preliminary estimate $3–6B annually depending on the pace of displacement, pending independent score; portable benefits and learning accounts funded by employer contributions.

Timeline

Legislation introduced Year 2, after the first National Systems Audit measures where displacement is happening.

What it does: Four supports for families raising children, designed so small businesses are not left carrying the cost alone.

Paid Parental Leave Insurance: Every working parent receives up to 12 weeks of paid leave after the birth or adoption of a child, at about two-thirds of their wages up to a cap. It is funded the way the programs in 14 states and D.C. are: a small premium shared by workers and employers, about 0.3% of wages, or roughly $65 a year for a median worker’s share. This is a new contribution, and the platform says so plainly. Job protection under the Family and Medical Leave Act extends from employers with 50 or more workers to those with 15 or more. States with their own programs keep them; the federal benefit is a floor they can build on.

Childcare Help That Reaches Every Family: The Child and Dependent Care Credit becomes refundable, so families who owe no income tax under the Zero-Tax Floor still receive it.

More Childcare Providers: Small home daycares are allowed in residential neighborhoods without special permits, under the same safety rules, as part of Policy 2.8. A childcare apprenticeship track joins the National Apprenticeship Corps (2.7), childcare licenses carry over between states, school buildings open for before- and after-school care, and small businesses can share childcare centers, building on the 2025 expansion of the employer childcare credit.

First-Year Baby Credit: In a child’s first year, the Child Tax Credit rises to about $5,000, paid monthly, when costs peak and parents’ income often drops.

Why it helps: Childcare now averages $13,184 a year and takes about a third of a single parent’s income, and the supply of licensed centers fell in 2025. The United States is the only wealthy nation without national paid parental leave.

Cost

Paid leave is self-funded by its dedicated premium (estimated $25–35B a year). The refundable childcare credit and first-year credit cost an estimated $13–15B a year. Pending independent score.

Timeline

Legislation introduced Year 1. Leave premiums begin Year 2 and benefits Year 3; the credits phase in with the Zero-Tax Floor in Year 2.

What it does: Replaces broad, across-the-board tariffs with targeted protection where national security is at stake, and invests in American workers instead.

Targeted, Not Across-the-Board: Tariffs stay where real strategic risks exist: advanced chips, critical minerals, medicine supply chains, and goods that China subsidizes and dumps below cost. The broad tariffs on everything else are phased down quickly, starting with the parts and materials American factories need, then household essentials such as food, baby goods and medicine. In return, the United States negotiates lower barriers in both directions with its allies.

Paid For Honestly: Tariffs raise real money. The Yale Budget Lab estimates about $1.9 trillion over ten years under current law, and Americans pay most of it in higher prices, about $1,100 per household a year. Each step of the phase-down takes effect only as an equal amount of replacement revenue is enacted, so the Ledger stays balanced. The replacement source will be chosen and independently scored before the first general-election debate.

Congress Decides: Under Policy 1.11, any major tariff lapses after 150 days unless Congress approves it.

Workers First: Employers receive an apprenticeship hiring credit (Policy 2.7), and workers who lose jobs to imports are covered by wage insurance (Policy 2.9).

Why it helps: Most economists find broad tariffs are paid mainly at home. A Federal Reserve study found the 2018–19 tariffs reduced manufacturing employment overall, because higher costs for parts and materials and retaliation abroad outweighed the protection. In February 2026, 60% of Americans disapproved of the tariff increases, while protection of strategic industries has broad support.

Cost

Revenue-neutral by design: every reduction is matched by replacement revenue before it takes effect.

Timeline

Phase-down schedule published Month 6; first reductions on factory inputs in Year 1, as replacement revenue is enacted.