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
Dave thank you for providing an explanation of the trickling. Not totally wrong. The rich do provide jobs but many of them are low paying. Call this a slow trickle. The Bernie Sanders position the rich can and should pay more but the opposite argument is at least as strong that the rich should not be taxed at such a high rate as to punish them. I don't begrudge Taylor Swift her profits. That other folk are poor does that make her evil? To be noted she does help causes though.
ReplyDelete'Tis a complicated subject but my position is simple. Whether you're wealthy or not wealthy the bulk of your income should be yours. This helps everyone. The Left comes across as hating the wealthy and tbh I think this is partially true. Having said that the Right leans too much towards the wealthy. Republicans never explicitly talk about tax cuts for the rich because if a candidate ran an explicit campaign on tax cuts for the rich he or she would lose. We need the rich to save and provide for us doesn't resonate. Sounds more like an oligarchy.
ReplyDeleteI guess I come land here...
ReplyDeleteI think the MAGA era that group wants to return to would be the post WWII era. Lots of jobs, an expanding economy, a world in love with us, sans France of course, and plenty of low cost gas for our 8 and 12 cylinder engines. We built schools, universities, hospitals, roads everywhere and more.
In CA, college was free. Free!
How did we do it? Taxes. High taxes. In 1945, every dollar earned above 200K [$3.5 million in 2026 bucks] was taxed at 90%, or about 75% after deductions.
You want stuff? Ya gotta pay. And pay we did. And yet, even with those high rates, our economy grew, the deficit stayed low and we funded a lot of growth.
Sadly, when the MAGA crowd crows about going back to the good old days, they want all that cool stuff, like freeways and sewers, free. It's almost like they vote for people that promise them a bunch of freebies for their votes.
Well at least you're honest but we don't see 100% on this. This is where I lean libertarian (partly). We enter into a moral area. How much can the government take from your income before it becomes immoral? Valid question. As for the rich if someone comes by their wealth honestly and through sheer dint of hard labor what exactly is the issue for the Left? They should be able to enjoy the fruits of their labor and not be punished through confiscatory taxation. Legit discussion.
ReplyDeleteNot to mention local governments get A LOT through property taxes. Quarterly. Here it starts with the County tax then later on 3 payments to the City of Yonkers and the Assessor acts like you own a mansion. It's not the federal and state income taxes holding me back Dave It's the property tax. Property tax doesn't seem to garner that much discussion though.
ReplyDelete