Econ Paper: Tax Cuts for the Rich Make the Rich Richer, Don't Help the Economy and Don't Trickle Down (company, money)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
This paper from the London School of Economics reaffirms what most of knew all along: "Trickle down" tax cuts don't work. They don't benefit the economy as a whole, they don't benefit the lower income classes. They only help the rich get richer and increase income inequality.
The authors used statistical and analytical methods to determine the effects of tax cuts for the wealthy from 1965 to 2015 in 18 countries.
"Our findings on the effects of growth and unemployment provide evidence against supply-side theories that suggest lower taxes on the rich will induce labour supply responses from high-income individuals ... that boost economic activity...Overall, our analysis finds strong evidence that cutting taxes on the rich increases income inequality but has no effect on growth or unemployment."
This paper should be the final nail in Trickle Down's coffin. I suspect supply-siders know their theory is endangered because they are too embarrassed to call it "trickle down" anymore. Can we all finally admit and agree that supply side doesn't work and move on?
This is a good example of baffling with B.S. This is a working paper that is part of international inequalities institute study done by the London school of economics AND political science. This paper is using the data from 18 countries and 30 odd tax cuts over 50 years - with unemployement, economic activity, gdp,etc that would be a lot of data - where is it? The charts hide what is actually being analyzed.
This is really just a series of charts that is more concerned with income inequality than actual tax cut analysis. There is more in the bibliography than actual data analysis shown. Also their conclusion shows a heavy bias - Tax cuts are about economic growth, tax cuts are not about resolving income inequality. There is nothing in the paper that suggests that any of this applies to any specific country.
Not even close to a definitive study of the issue.
They should've included the household savings rate by income distribution. The personal savings rates for the top 1 percent and 1-10 percent are 40 and 10 percent, respectively. By definition, additional tax relief targeted at those groups are going to go to savings. We saw that with the personal savings rate soaring to 13 percent after the first Covid stimulus. It will get spent down by the bottom 90 percent who have a zero or negative savings rate.
The top 1 percent derive more than 40 percent of their incomes from realized gains. If not for the QE-welfare program, this whole system is kaput. They and the rest of the top 10 percent would have to aggressively sell their assets to meet debt payments.
I don't mind paying a reasonable amount of tax, as it is the "glue" that holds society together and helps support the widows, orphans, and infirm, plus the infrastructure that helps me make my income to begin with.
On the other hand, there are WAY too many people living in the U.S.A. today that think they are entitled to the fruits of the labor of others, and think the answer to their prayers is to Seize the Means of Production. It's not the Government's money, the Government didn't earn it, and they waste way too much of what they take in currently to give them any more. What is it they say? "It was so cold today I saw a politician with his hands in his OWN pockets".
Marx and Lennon were a much better Vaudevillian and Songwriter than they were economists.
Meh ,,,who cares ..I cant solve the worlds ills or worry how others are doing , that is above my pay grade ... I care how I do so we are not a burden on our kids
...On the other hand, there are WAY too many people living in the U.S.A. today that think they are entitled to the fruits of the labor of others, and think the answer to their prayers is to Seize the Means of Production...
Too many people are hung up on: "he didn't earn it," "he doesn't deserve it," and "how come he gets it but I don't?"
Let's take forgiving student loans for example. Are students entitled to this? Absolutely not. But loan forgiveness will free up a tremendous amount of latent demand. Recent grads will buy homes and cars, giving the economy as a whole a large boost. The students benefit directly. Every one of us will benefit indirectly through a booming economy.
I paid off all of my loans. Is forgiveness fair to me? No, but I don't care. As long as the economy as a whole benefits, I'm good with it. The rising tide will lift all boats, including mine. I support the policy.
It doesn’t matter. Poor, right wing trailer trash will defend tax cuts for the rich at their own expense no matter what facts you give them. It’s sad. Glad I’m rich!
This has been a topic of discussion since I can remember going back to high school speech/debate class. Most commonly comparing and contrasting the policies of Presidents Hoover and President Roosevelt.
What I remember the most common conclusion being was that Hoovers plan (trickle down/supply side) would have worked if decades of time for it to work were possible. BUT, Roosevelt's work programs put money into the hands of the common man who would immediately spend it hence creating demand from the "suppliers" of goods and services. It worked much more quickly.
Giving money to the 1% may only wind up being welfare for the wealthy. They may take that money and invest it in overseas productions which would not really serve the other 99% very well. Even if it isn't invested overseas it may go into investments here that only make the 1% more comfortable and do not benefit the other 99%.
In Roosevelt's programs a lot of the wealthy of those times were quite embittered. They didn't think
they should have to get off their butts and gear up to providing goods and services created by the
working class. They thought that whatever they did, whenever they felt like it, should suffice.
When I would speak with my Great Grandad and Grandad about these matters in the evening after school they would tell me that just because men of wealth were at the top in our country didn't mean that they couldn't be as lazy or worthless as some of the reprobates of the working class. But because they were of means they indulge themselves as parasites in the economy. (meaning money from the government should come to them without question as they are too big to fail) It's still throwing money down a rat hole if they don't use that money in good faith.
Roosevelt's programs did at least make people work and instill a work ethic. With the young workers much of their money was sent home to their folks & family. The young workers were sheltered, fed, clothed, and their needs looked after like a para military life.
But this is some historic reference you could cite in your paper. Then fast forward to President Regan
reviving Hoover's failed policy to attempt to prove it would work. And how it went with his "Boy Wonder" David Stockman who ultimately deserted it & Reagan. Google David Stockman and see what he is saying about "Trickle Down" economics nowdays.
The perfect example of liberal progressive policy the last few years is the disappearance of mom & pop shops.
When the workers have healthcare paid by the employers and the business owners themselves can't afford to pay themselves.
These businesses closed down fast and these policies just keep helping big businesses.
Regardless of what tax cut, big companies like Apple and Amazon don't need the stimulus but business tax cut is good for them because small businesses that get tax cut will order more goods from Apple and Amazon.
People wonder why the unemployment is so high because most small businesses shutdown during pandemic and big businesses are business as usual.
So business tax cut helps small businesses owners and the media and people have made small business owners their punching bag.
The perfect example of liberal progressive policy the last few years is the disappearance of mom & pop shops.
Huh? Mom and Pops got squeezed out in the 1980's with the arrival of Big Box stores like WalMart, Home Depot, Toys'R'Us, Best Buy, etc. Liberal policy had nothing to do with it. It happened on Reagan's watch but I'm not going to blame him for it.
Amazon came later. While they did hurt independent booksellers, they've also hurt the old school big box stores too.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
