Photo Courtesy:

Hilbert Morales


Much concern exists regarding the economic disparities extant in the American domestic economy.

Those concerned with ‘income disparities’ have tried to use ‘income tax credits’ (IRS rebates to those having very low gross incomes). The challenge is to motivate those low income individuals to actually apply for their ‘income tax credit rebate’ by actually filing their IRS 1040 form when they know that they owe no taxes. Also there is no profit for tax preparation services when servicing these tax filers.

Another concept/nidel, UNIVERSAL BASIC INCOME (UBI), was presented by Fareed Zakaria, Global Public Square (GPS) on Sunday, October 16, 2016 (MSNBC). Zakaria reported,”Amidst concerns that Donald Trump may have paid no IRS income taxes for decades, many Americans are searching for ways to even the economic playing field. One concept that keeps popping up is: “Should the federal government send each adult individual a check for a healthy amount every year? How would you like to receive a check each year for, let’s say, $15,000? (Let’s) explain how that would work.”

Is UNIVERSAL BASIC INCOME (UBI) the right model which will be accepted by by a broad sector of Americans? (Especially those who pay income taxes.) This concept may be debated over the next 20 years.” stated President Obama in a recent interview (Wired Magazine). Fareed said, “We will not wait 20 years for that debate (because) we will have it right now. It is called the ‘Universal Basic Income (UBI).’ Imagine each American citizen receiving a check from the federal government each year for, let’s say, $10,000, no questions asked. You do not have to do anything to become eligible. Being a U.S. citizen is enough. Why should the government do this? “Well, it is under consideration around the world and even being tested in a handful of nations.” said Zakaria. “You see, technology is now replacing more and more jobs that now humans do. Western societies produce much wealth, however that wealth has a distribution skewed very unequally. The UBI is a way to deal with the unemployment or underemployment that appears to have become a feature of modern western life (and society). In other words, if you are a truck driver and an autonomous vehicle put you out of your job, you would have (receive) some income to fall back on. Let’s debate this issue further.”

Chris Hughes is a co-founder of Facebook and a supporter of UBI. Eduardo Porter is more skeptical of this UBI idea. Eduardo is a columnist in economics for the New York Times.

Chris, How did you come to think about (UBI)? Watching IT and Facebook develop must have had something to do with this.”

Chris made the following points: 1) the world is changing incredibly fast; 2) government welfare agencies are not keeping up nor coping well; 3) the nature of work is changing; redefining itself; 4) It’s a ‘gig economy; 5) society’s safety net has not enlarged as quickly in size and effectiveness.

The UBI idea is really Social Security for All…a check from government that enables individuals to make choices & live their lives as they see fit.’ This UBI idea is pretty crisp and clear.”

Fareed, “Do you really think that automation will really eliminate so many jobs that there is not enough work for people to do?”

Chris: “Probably, but the whole argument that robots will take away jobs (or maybe not take them away) is a lot about procedures (and process). But this is the present reality: America’s family household income today is not what it was some 25 years ago. People are trying to adapt.”

When interviewed by Fareed: Eduardo Porter made the following points: 1) The future is already here with many families struggling to make ends meet. 2) These sorts of predictions have been made for about 100 years; 3) Automation and robotics have changed the labor market; 4) New jobs and products are created or produced to meet new demands and needs. 5) Agricultural production labor dropped from 67% down to 2%; 6) Government needs to begin to implement UBI programs.

Economist Milton Friedman recommended ‘government giving money to the impoverished as an effective way to cope with poverty & welfare needs.

Morales points out that the low income individual has a 100% propensity to spend their money as consumers buying essential goods and services. This sustains the American Consumer economy at a reasonable social and economic cost. When autonomous vehicles are fully developed by Google and others, many workers who drive on their jobs (cars, buses, trucks) may become unemployed.

Another important point: In Norway, all income tax information is available online in the public domain as a means of ensuring that income disparities are minimal. Anyone can learn what a coworker earns; what his/her boss and supervisor earns. This feature keeps income tax payment avoidance at a very low level. Take note that a liberal economic ideology is essential to having the present income disparity issues addressed.