By Patricia L Johnson and Richard E Walrath

Part one of this series dealt with an excellent solution for dealing with the extraordinary income equalities we are now facing in this country. The solution was offered by Economist, Milton Friedman, in his “Negative Income Tax” theory published in 1962 in his book titled “Capitalism and Freedom.”

Friedman’s theory was to provide each poor family with a guaranteed income that they could spend on whatever they wanted. This would eliminate the need for welfare payments, and food stamps, rent subsidies, etc. It would also give poor families more bang for their buck because the money would go directly to the family via an IRS payment, vs., going through the various organizations that now provide assistance.

The problem with Friedman’s theory was it was so simple and logical and would have saved taxpayer funds while helping to reduce the number of destitute families that it never got off the ground. It was never implemented by those at the top.

But it apparently did not go unnoticed by members of the Republican Party because NIT became the deal of the day under Republican administrations. If more money would help bring destitute families out of poverty, what could it do for the well-to-do?

From President Reagan through President George W Bush, each time this country had a Republican President, taxes have been lowered on the rich. The end result is recessions, government stimuli to get the economy moving again so the Republicans can pass another tax cut for the rich so we can have another recession. It’s a vicious circle that has resulted in income inequality in this country that will take decades to reverse. We are now at a point in time when a guaranteed annual income may eliminate all that nonsense and get us back on the right track.

The following charts were prepared for “Un bon croquis vaut mieux qu’un long discours,” one of our articles on the economy written in 2011. Charts for the Obama and Trump terms will be prepared for a follow-up article.

The four separate charts cover a period of the 28 years, from 1981 through 2008 and are separated by each Presidents term of office. As you can readily see we had Republican presidents for 20-years and a Democratic president for a period of 8-years.

Without a doubt this is an instance where if “A picture is worth a thousand words” the four charts have to be worth a few trillion.

Republican presidents are consistent from one administration to the next – they create deficits, each and every year they are in office, the only exception in the 20 years of Republican leadership is 2001, when there was a surplus.

Why? The answer is simple, Republicans cut taxes which create deficits, and those deficits are then added to the National debt. When Democrats take over, they have to raise taxes in order to break even. Fiscal year 2020, the last year our former Republican president was in office had a budget deficit of $3.1 trillion dollars. No one wants higher taxes, but let’s face it, our founding fathers did not set up a tax code for the sole purpose of making the rich richer, and the poor poorer.

The tax cuts, which were primarily directed towards the rich, are part of the reason why people are poor. Instead of tax cuts for the rich, we need tax increases to replace our rotting, decaying and worn-out infrastructure. The recent disaster with the Texas electrical grid is a prime example of what can happen in any state.

Our founding fathers set up the tax code with a 7-1 ratio. They intended those at the top paid to pay 7 times as much in income taxes as those at the bottom. For additional information on this subject click the following What Was the Intent of Our Founding Fathers on Taxes for the Rich? or type any of the following words in the Articles and Answers search box; taxes, deficit, national debt, economy, etc.

© 2021 Patricia L Johnson and Richard E Walrath

Patricia L Johnson is a former special assignment writer/photographer residing in Northeastern IL. Richard E. Walrath is a former Budget Analyst for Ohio State University, residing in Central Ohio with his family.