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THE YOKE OF ECONOMIC INEQUALITY

January 2, 2020

Professor Kennedy in her blog today floated the idea of adoption of a UBI (Universal Basic Income), an idea one of the Democratic candidates for president extols. It amounts to having the government send a monthly check in a sum certain to its citizens as a means of reducing wage and wealth inequality, which is worse today than it has ever been in recorded history.  I responded to her effort, slightly edited, as follows.

The Supreme Court finally decided a tax on income was constitutional after all and it went into effect in 1913, advertised as a progressive tax in which the more you made the more you paid, but that was before tax counsel and lobbyists for vested interests got their hands on loopholes and made a mockery of the idea of a progressive tax (e.g., I paid more taxes than Boeing last year and I did not, as Boeing did, have eleven billion dollars in profit).

With Chapter 11 which authorizes a bankruptcy court to void labor agreements between corporations and their workers, among other things, the bankruptcy code, like the IRC, is in great need of reform and I have been writing as an advocate for reform of these two codes for years, but to no avail. Could corporate campaign contributions have anything to do with how these codes are fashioned, maintained and expanded? Nah, perish the thought!

Verizon joined Boeing with a huge profit last year but with no tax liability along with several other major corporations who paid nothing in taxes as well as yet others who paid minimal amounts into the pot. Indeed corporate taxes on an average of 11.3 percent were lower than the average percentage paid by middle class taxpayers last year! If our IRC were truly progressive, many billions of dollars would be available to us to do UBIs, infrastructure, healthcare, tuition forgiveness etc., and if a wealth tax as Warren suggests and which renowned economists such as Piketty and Stiglitz favor were added to such a mix of reforms, the billions would in time morph into trillions, which would enable us, along with other positive initiatives, to catch up with China and Japan with their bullet trains and other infrastructure improvements that efficiently move goods and people while our urban areas are clogged and odorous with 20th century modes of transport.

Unleashed from debtor’s prison, so to speak, college graduates and dropouts whose lives are on hold while they deal with tuition debt could marry, have babies, buy houses, and in general significantly increase aggregate demand, the nearly sole arbiter of economic growth, and with the millions of new jobs created by this hump in aggregate demand the stage is set for the return of union representation and an end to a ridiculous minimum wage which recently celebrated (?) its 10th birthday since it was last raised. No wonder the S & P and Dow are at historic highs what with the theft of wages that the corporations whose performance they supposedly measure have enjoyed with such growth in large part coming from theft of decent wages that should have been paid to their workers, a major factor in today’s pitchfork-ready wage inequality crisis.

I could go on and on but I’ll end this rambling narrative as follows: I agree 100 percent with Professor Kennedy’s version of the crying need for us to have a fairer distribution of the wealth and income our economy produces, an economy in which all of us as stakeholders fully participate and not one owned lock, stock and barrel by mere Walll Street financiers of various projects that make up our economy – and I use the word “our” advisedly – it doesn’t belong to any other stakeholder irrespective of incessant propaganda drumbeats from the WSJ and others to the contrary. It’s our economy and as stakeholders and consumers without which there would be no economy at all we should have a major say in how it is to be conducted and a seat at the table in how its fruits are to be distributed.

As to adoption of  UBI, that is one of several means with which we can fight the worsening wage and wealth inequality the vast majority of us are enduring. Other means include single payer healthcare, cost-free tuition etc. Socialism? Hardly. It’s called fair play, something in short supply in today’s sea of greed and misinformation (aka propaganda), so let’s end this crisis in wage and wealth equality the first Tuesday of next November.     GERALD          E

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