Reply #1: OK, I did that mental exercise.

[eallen]

The result is a nation that essentially destroys its equity and venture capital markets, that as a result quickly loses both its economic competitiveness and its wealth, whose citizens are ground down into poverty and who, if they can, soon flee to other nations with greater opportutnity, and whose government eventually is unable to provide the social services it did once upon a time.

There are many small enterprises that are 75% owned by their employees. What happens when such an enterprise needs capital? Most cannot borrow, because they are too much a risk. The usual route now is to look for an angel investor or venture capital. By your rule, those that are at the magic 25% outside investor figure are forbidden from doing this. So.. what happens? The business goes under.

And what happens when employees leave? If they retain their ownership of the business, then each employee who leaves increases the proportion of outside ownership, until eventually that 75% rule is violated. If they don't, then they don't really own a stake in the company.