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Isn’t this a restatement of trickle down economic theory (sans raising inheritance tax), which has not really panned out when attempted?
by lastofus 7y ago
Isn’t this a restatement of trickle down economic theory (sans raising inheritance tax), which has not really panned out when attempted?
- nugget 7y agoMy understanding of trickle down economics is that you get more economic activity by putting a dollar in the hands of the bottom 10% than the top 10%, which makes sense since the propensity to consumer is higher at the bottom. By investing, the top % supports invention and innovation. By consuming, the bottom % validates those inventions and innovations that are worthwhile, versus those that are worthless. Both functions are required in order to keep the economy humming along producing and consuming new goods and services at a rapid pace. There would seem to be some function which maximizes the utility of each group in their respective roles. That's what I would want tax policy to reinforce.
- deleted 7y ago[deleted]
- michaelmrose 7y agoThe problem with trickle down economics is that it involved decreasing the taxes of the wealthy so that in theory that money would trickle down to improve the lot of the poorer. This doesn't work because the rich can opt to do a lot of different things with their money including hide or invest it overseas. Taking the money of the rich and using it to directly improve the lot of the less fortunate has been tried and actually works as one would expect.