Say a wealthy doctor owns a mansion in Scarsdale he's so overflowing with money there are coins and money on the sidewalk that passerbys happily pick up. I've never experienced this myself walking past a wealthy person's residence or place of business and paper bills wafting down from the sky. The notion did indeed start with Reagan though.
I understand dribble-itis though.
Financial plumbing - that which trickles down gets sucked up quickly.
ReplyDeleteTo expand a bit, economists reported -
ReplyDelete"Here are the key reasons why this theory does not work in practice:
No Link to Growth: Research covering 18 advanced economies over 50 years found that tax cuts for the rich did not boost per capita GDP or lower unemployment rates.
Increased Inequality: The primary consequence of these tax cuts is that the wealthy experience faster income growth, which widens the wealth gap.
Reinvestment Missed: Companies often use tax savings for stock buybacks or dividends to increase shareholder value, rather than investing in new infrastructure or higher wages.
Reduced Economic Demand: When wealth concentrates at the top, overall consumer spending—which drives the economy—slows down because lower and middle-income individuals are more likely to spend extra income than the wealthy.
Failed Historical Record: Critics argue that decades of tax-cutting policies, from the 1980s onward, have consistently failed to produce promised economic booms." A beloved concept of the rich folk.
Z-man... here's what I've seen on the Mothership from the Captain of that glorious group if Trump gang plank walkers...
ReplyDeleteWe should cut taxes for the rich so they can start business where us poor or middle class folks can work. The rich, as Romney said, are the makers and us takers need ppl like them so provide for us.
That can only be done, they will only do that, if their taxes are low.
Which theoretically will lead to an economy that trickles down to us peasants.
Except David Stockman, the Reagan budget director who devised the system, also known as "a rising economy that raises all boats" and "an economy where tax cuts pay for themselves" has since disavowed this economic theory.
As you noted, it did indeed did start with Reagan, the first US President who started this rush to deficit spending that has now essentially bankrupted the US.
Z-man... that anon comment is from me...
ReplyDeleteI don't view wealth as an inherently bad thing. I don't view the wealthy as automatically evil. There is no moral necessity to punish the wealthy. Having said that I don't get the trickle down part. My neighbor has a Lexus. Good for him but it doesn't help me.
ReplyDeleteNot a goal of mine, but we note -
ReplyDelete"“We conclude that the concentration of wealth is natural and inevitable, and is periodically alleviated by violent or peaceable partial redistribution. In this view all economic history is the slow heartbeat of the social organism, a vast systole and diastole of concentrating wealth and compulsive recirculation.”
― Will Durant, The Lessons of History