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50 years of tax cuts for the rich failed to trickle down, economics study says

134 points by NiceWayToDoIT 6y ago

isoblvck 6y ago
no shit....
- nickthemagicman 6y ago
  Haha came to say the same thing. File this revelation under the no shit category.
mikestew 6y ago
Perhaps I'm having a Mandela Effect moment, but hasn't "trickle down" been debunked before this study...repeatedly? Not just "no shit", but actual studies and stuff? Regardless, Will Rogers is credited with the phrase "trickle down" to refer to supply-side economics, so it has gone on longer than 50 years. Mr. Rogers also did not mean the turn of phrase to be complimentary.
- Someone 6y ago
  Indeed. Wikipedia (https://en.wikipedia.org/wiki/Trickle-down_economics https://en.wikipedia.org/wiki/Trickle-down_economics) say he used it in 1932, and says the idea is even older (“leak through” in 1896; “If you feed the horse enough oats, some will pass through to the road for the sparrows.” in the 1890s)
  - mikestew 6y ago
    “If you feed the horse enough oats, some will pass through to the road for the sparrows.” Boy, an accurate assessment of supply-side economics if there ever was one: "let the plebs pick through our shit to see if we left any excess for them".
  - commandlinefan 6y ago
    > If you feed the horse enough oats, some will pass through to the road for the sparrows Funny enough in that analogy: you're feeding the horse because you care about its well-being and it's doing something helpful in return, whereas the sparrows are actually a nuisance providing no value to anybody and just taking without giving anything in return.
    - rbanffy 6y ago
      It's a good analogy. The rich don't care about the sparrows.
    - tsdlts 6y ago
      As Mao Zedong learned late in his life, sparrows do actually provide value.
- pmiller2 6y ago
  It has, but half the country still hasn't gotten that message.
  - ardy42 6y ago
    > It has, but half the country still hasn't gotten that message. That's at least partially because the wealthy have the means to hire lots of smart people to create sophisticatedly misleading propaganda for them, and make sure it's widely disseminated and influential.
    - Florin_Andrei 6y ago
      Social media may turn out to be part of the explanation for the Great Filter.
      - rbanffy 6y ago
        When I see social media I remember the Krell Big Machine in Forbidden Planet. We built something that brings out our worst demons.
- imtringued 6y ago
  It's just an excuse to justify selfish tax policy that favors the wealthy. It obviously doesn't work because the wealthy don't have to invest into domestic jobs. They can also use their money abroad. If you give them more money they are just going to spend more of it outside your country. The opposite is also true. The vast majority of consumers spend their money domestically. Yes the products they buy are often imports but in many cases a big chunk of the money goes to cashiers, delivery drivers and so on. Of course I am simplifying this a bit. In theory the roles can switch and business owners spend more domestically and consumers spend more abroad but as it is right now the rich just invest into Chinese businesses or production capacity in China. Think of companies like Tesla building factories in China.
  - pmoriarty 6y ago
    "It obviously doesn't work because the wealthy don't have to invest into domestic jobs. They can also use their money abroad." They can also just hoard most of it and pass it on to their descendants -- this is how you get dynasties. Tax havens and creatively constructed foundations are another way of making sure the government never gets ahold of their money.
    - 0x6862 6y ago
      Sure the rich hold some gold & BTC but most of their wealth is in investments (stocks, bonds, infrastructure etc.) to generate positive real returns - given inflation. This is far from hoarding
      - jacques_chester 6y ago
        What the paper shows is that the increment in potential investments by the wealthiest don't seem to improve growth, but does worsen inequality. The individually wealthy are not required for the aggregation and allocation of capital. Governments and financial systems are typically more capable at achieving this requirement in a welfare-maximising manner.
  - throwaway894345 6y ago
- Florin_Andrei 6y ago
  > hasn't "trickle down" been debunked before this study...repeatedly? Not just "no shit", but actual studies and stuff? Regardless, it's still the central dogma of the politics of a large part of population.
  - rbanffy 6y ago
    We desperately need to educate these people because they'll continue to vote against theirs and our interests.
- throw0101a 6y ago
  > Perhaps I'm having a Mandela Effect moment, but hasn't "trickle down" been debunked before this study...repeatedly? The idea has been around in some form or another for a long time: * https://en.wikipedia.org/wiki/Trickle-down_economics#History_and_usage https://en.wikipedia.org/wiki/Trickle-down_economics#History... The most recent reincarnation was known to be not very good economics from the get-go: > What I want to talk about is when, exactly, the GOP went over the edge. Obviously it didn’t happen all at once. But I think the real watershed came in 1980-81, when supply-side economics became the party’s official doctrine. > I’m not sure, even now, whether people who aren’t involved in economic policy discussion understand that supply-side wasn’t a doctrine like monetarism or even real business cycles — ideas I may think are wrong, but which had and to some extent still have significant support from professionals in the field. Supply-side economics never had any evidence behind it; it never had any support in academic research; it barely even had any support among economic researchers and forecasters in the business world. It was and remains crank economics pure and simple, with nothing going for it except political convenience. > Yet 35 years ago the GOP was already willing to embrace this doctrine because it was politically convenient, and could be used to justify tax cuts for the rich, which have always been the priority. > And given this, why should anyone be surprised at all the reality denial and trashing of any kind of evidence that followed? You say economics is a pseudo-science? Fine. First they came for the economists; then they came for the climate scientists and the evolutionary biologists. * https://krugman.blogs.nytimes.com/2016/07/18/the-gops-original-sin/ https://krugman.blogs.nytimes.com/2016/07/18/the-gops-origin... He has an entire section on this in this recent book Arguing with Zombies, along with how the GOP are worried about deficits and debts when they're out of office, but then don't once they're in power (e.g., tax cuts in the December 2017 budget): * https://wwnorton.com/books/9781324005018 https://wwnorton.com/books/9781324005018 * https://www.worldcat.org/title/arguing-with-zombies-economics-politics-and-the-fight-for-a-better-america/oclc/1134536617 https://www.worldcat.org/title/arguing-with-zombies-economic...
- Diederich 6y ago
  George Bush, Sr., characterized Reagan's economic paradigm (Reagonomics/supply side/trickle down/etc) as "Voodoo economics": http://news.bbc.co.uk/2/hi/americas/270292.stm http://news.bbc.co.uk/2/hi/americas/270292.stm https://www.youtube.com/watch?v=o8hnM6xNjeU https://www.youtube.com/watch?v=o8hnM6xNjeU
- partiallypro 6y ago
  "Trickle down" is an economic slur, it's not something economists believe. It's just what some people call a certain policy set.
  - jariel 6y ago
    The term they use is 'supply side' economics - meaning, you support businesses with tax cuts, subsidies, Quantitative Easing, then the 'core' economic mechanisms are healthy, people get hired (i.e. trickle down). As oppose to 'demand side' i.e. give tax cuts or money to the poor - they spend it, the economy grows.
    - 0x6862 6y ago
      You forgot the big one - regulation. Supply side is about making it easier for people to produce. You won’t find many free market types supporting QE and subsidies. Would you rather live in a world where there’s only 1 large firm because over regulation has created a high barrier to entry and little incentive to risk starting a competitor, or a world with many firms where it’s easy for people to compete and they’re incentivised to do so?
pkaye 6y ago
Wouldn't trickle up economics work better? Poor people have more unmet needs and more likely to spend any extra they get into the economy.
- FilterSweep 6y ago
  That’s effectively what Nick Hanauer has been saying more recently but I believe we are too far gone at this stage.
  - Florin_Andrei 6y ago
    > I believe we are too far gone at this stage When irrationality and straight-up lying are so entrenched, you wonder what it would take to shake up the system. The only thing I see is some major catastrophe, like a meteor strike or something on that scale.
    - takishan 6y ago
      I think we are seeing the slow disintegration of the system as we speak with the pandemic. Or rather, we are seeing an acceleration in the slow disintegration that was already happening. The rise of the populist right all over the world is a troubling sign of things to come. The people are not content. Look at the BLM protests in the US, they were the largest uprising in American history. They were bigger than the MLK riots. Content people do not riot. Needs are not being met, or at least perceived needs are not being met.
    - sjg007 6y ago
      The pandemic should've been enough but... meh.
  - redisman 6y ago
    The US government is very capable of handing out $1200 checks to everyone as we have seen. It is also extremely popular with the people. I mean I guess the only impediment is courageous politicians but that might be a large obstacle. I wonder if they gave out the $1200 checks every year and funded it by taxing the top brackets, that would cause a large surge in consumer spending (mostly on essentials but also on luxury goods as you go up the income bracket).
hilbert42 6y ago
This fact was obvious long before 50 years ago! For starters, just go back to Marx and Engels in the 1840s. The longstanding problem with that trickle down argument is and has always been that the rich have always had the money to: (a) effectively lobby politicians into accepting that viewpoint, and or (b) becoming politicians thus enabling them to enact laws that benefit themselves directly, and (c) to purge or whitewash arguments/statements to this effect from history (such as my comment here) by the effective use of propaganda. Ordinary people simply don't have the financial resources to effectively counter these self-serving actions. It really is time we stopped mucking about and called this economic nonsense for what it really is—a charade or justification that only fools the gullible. For instance, we could begin by abandoning the Nobel Prize for economics, this would bring the artificially-propped-up status of the Milton Friedmans of this world back down to earth.
- AnimalMuppet 6y ago
  And the Paul Krugmans.
  - hilbert42 6y ago
    Yeah, unfortunately that whole trade matter got well out of hand before any of us realized it.
NiceWayToDoIT 6y ago
This is not a new thing for those who are fighting for better wealth distribution, but despite raising many voices in UK, politicians who create policies still use the same excuse to pump huge amounts of cash to the rich people. In that regards maybe this study is an important step toward change.
eloff 6y ago
I'm really curious how many of our democracies fail in this specific case. There aren't a lot of wealthy people, so if politicians are pandering to the majority, this is the wrong call. It's well known not to work for a long time, so logically it's also the wrong call. Are most politicians wealthy? Is that why they seem to overly protect the interests of this group over the rest of the population? Straight up self-interest or corruption?
- slindz 6y ago
  From my perspective, it costs an awful lot of money to run for office. If the only way to reach office is to convince wealthy people to fund your campaign, it shouldn't be a surprise if their interests wind up getting preferred treatment.
  - Florin_Andrei 6y ago
    The way church and state are supposed to be separate (lots of potential comments here, but let's move on), we should have a separation of money and politics. And for reasons that are quite similar. It's a public office, where public servants work, for the good of everyone, not for personal enrichment. It's a job just like all the others. It should not be a place where oceans of cash keep sloshing around. No more lobbying. No more private funding of politics.
    - souprock 6y ago
      That thinking led to the corruption. Any normal senator, governor, or president has the skills to work at a high level in corporate America. That pays better, counting only the legitimate pay. It should be no surprise that voters are seldom able to hire (elect) anybody non-corrupt. We aren't paying market rate for the desired skills or for the level of responsibility. Senators get about $200,000 and the president gets about $400,000. At an S&P 500 company, CEO pay is about $15,000,000 on average. Elon Musk gets around $595,000,000. Tim Cook gets around $133,000,000. Sundar Pichai gets around $280,000,000. Satya Nadella gets around $77,000,000. None of those CEOs have responsibility for tariffs, military operations, hundreds of millions of people, thousands of nuclear weapons, or over 10 million employees. You get what you pay for. Proper pay: The senate splits 0.1% of GDP, the house splits 0.1% of GDP, the supreme court splits 0.1% of GDP, and the president gets 0.1% of GDP. Lump the VP in with the senate, probably. That totals 0.4% of GDP for the whole group.
sunstone 6y ago
It did trickle down but to China, Vietnam, Indonesia and Silicon Valley.
- safetyengineer 6y ago
  It's mind boggling to see people embracing protectionism in 2020. We are doomed to repeat history.
konfusinomicon 6y ago
Now that the rich are used to lower taxes, if the government raises them won't the extra costs they incur just end up being passed down to the consumer via higher cost of goods/services from the businesses owned by said rich people?
- aaomidi 6y ago
  This is a good thing. In fact if this reduces consumption because higher priced we've won a major battle. However wages have stagnated, which means whatever we've done so far hasn't helped consumers at the end. So at this point I'd take lower consumption as a win.
- baron_harkonnen 6y ago
  Assuming that simple model was correct, wouldn't that then mean that in order for the consumer to be able to afford such goods and services the would, in turn, have to be paid more? It's not like the American consumer is a tremendous store of surplus value, especially given that they have effectively no saving on average and rising debt. If the wealthy conspire to charge more because of income lost to taxes, then the labor class will simply have to consume less or somehow make more. As far as the former goes, historically capitalism doesn't do great when it decreases the material conditions of workers (which is what forcing decreased consumption leads to).
- standardUser 6y ago
  You can't just charge more because you're mad and want more money, at least not if you expect to continue to be competitive.
  - bearjaws 6y ago
    Good point. The teaching of supply vs demand vs cost of production has really let our society down recently. Very few people seem to be aware that non-essential items are priced based upon what people are WILLING to pay for it, not what it costs to produce. This results in comments like "well the price for XYZ will just go up!", when in reality its much more complicated.
- 6y ago
safetyengineer 6y ago
It should be pointed out, the rich does not refer to the 1-10%ers as many HN visitors are. It refers to the ~0.01%. I'm sure many of us are unhappy about losing the SALT Deduction under Trump.
durnygbur 6y ago
The rich prefer to hire armies of accountants and lawyers to design the most hermetic pipeline funelling out everything they consider to be an excess. There is not a single droplet dropping, how could anything tricke down?
- johndevor 6y ago
  Cars, computers, cell phones, rockets to mars, etc... all exist because rich people bought the super expensive first versions or funded their development. We all benefit from those things greatly.
  - pwinnski 6y ago
    You seem to radically misunderstand the history of cars, computers, and cell phones, and I fail to see how we're all benefiting from rockets to mars--which don't yet exist--at this time.
    - dwaltrip 6y ago
      It is true that many innovative developments occur from well-off people funding or buying the initial versions. But it is ridiculously absurd to assert that all developments or even most come from this.
      - pwinnski 6y ago
        Agreed! Innovation via excess wealth seems like one of the most inefficient possible means of innovation. It happens, but it is by no means necessary.
  - bearjaws 6y ago
    A lot of early model cars were very affordable, the first iPhone was $600, nobody who is poor has concerns with Mars... This really isn't a compelling case.
  - bovermyer 6y ago
    That's false equivalence. The luxury goods market does not equate to the general economy, nor wealth distribution.
11thEarlOfMar 6y ago
This is only tangentially on topic, but I genuinely wonder about this. When people state that they want the wealthy to pay their fair share, the first two questions I have are, what constitutes wealthy and what constitutes fair? Let's take a specific person as an example of wealthy (let me know if you don't agree), and I'd be grateful to hear your thoughts: Wealthy Person X: - CEO, 55 years old, University of Illinois grad in bio-chemistry, put self through college working - Works 60 hour weeks, most Saturdays, some Sundays - $1,500,000 salary + stock benefits - Net worth $8,000,000 What is X's fair share in Federal Income Tax?
- t-writescode 6y ago
  Ignoring edge cases like selling a house, I would argue ‘fair share’ is for capital gains tax to have brackets that eventually equal regular income tax brackets, such that a CEO that makes $1 / year and 4 million in stocks, if he sells all 4 million in stocks 2 years later, isn’t paying only 15% income tax.
  - dlp211 6y ago
    Your base point is valid, your example is at best incomplete. Stock compensation is taxed as regular income. The appreciation of the stock afterwards would be taxes as cap gains.
    - t-writescode 6y ago
      Yes, you're right. I admit I had completely forgotten about that.
- soared 6y ago
  This doesn’t seem like a question inviting genuine discussion. Tax laws don’t take into account how hard someone works, where they went to school, or a taxpayers character. Unless your argument is that taxes should be based on factors outside of income/etc, it seems like you might be trying to bait people with some version of “Look how hard Steve works - you can’t possibly support raising taxes on him.”
zthrowaway 6y ago
This will not be a popular thing to point out, but trickle down theory was never an actual theory. As far as I understand nobody actually advocates for this theory on a serious level. Plenty of contemporary economists such as Joseph Stiglitz, Alan Blinder, and Paul Krugman denounce this as a non-existant theory.
- rbanffy 6y ago
  Politicians who use it to justify self-serving policies are not well reputed economists, but still define fiscal policies based on flawed economic ideas.
- standardUser 6y ago
  Isn't "trickle down" just a politicized label for supply-side economics?
- jonathankoren 6y ago
  You're looking in the wrong place. It's proponents call it "supply side economics". It is a discredited theory, but it is still popular idea among many serious people in public policy. If you want want a name of one (in)famous proponent, I'll give Arthur Laffer, inventor of the Laffer Curve. The curve says that as tax rates fall, government income goes up due to economic growth. You may have heard of this as, "Tax cuts pay for themselves." He famously invented the curve while drawing on a napkin. The napkin is now housed at the Smithsonian.
exabrial 6y ago
That's because the problem is Taxation, not tax cuts, not the rich. If the USA Government was on Charity Navigator, it'd have a 0 star rating for overhead and delivery. I'm 100% for gutting taxes until we measure results with what we spend. Every business measures their spend for efficiency and every financially savvy person also calculates the rate of return. Why we willy-nilly throw gazillions of dollars at the government to watch it being funneled into your Senator's Buddy's pocket is beyond me. If we're going to tax, the first step should be how to we measure the results.
- inthewoods 6y ago
  I broadly agree with you but measuring the results of some initiatives strikes me as very challenging. Two examples jump to mind. I remember reading about early childhood education investments. When the program was completed they saw no measurable results so the program was cut. Researchers picked up the study years later and did follow-up and found dramatic improvements in the children that were a part of the program. Now if the measurement endpoint was set to the 2nd point, the program would have been viewed as a success, but we have, as a country, an incredibly short term view. It would be extremely challenging to find anyone in the US government that would have invested in the program if they were told the results wouldn't be known for 40 years (positive or negative). The second example is military spending. This spend is done to keep us "safe" (others would argue it has other purposes e.g. to fund the military industrial complex or as a tool for stimulus). But if we take it at face value that military spend is supposed to keep us safe, what would be the measurable goal? I get the need for goals, but I think you need to understand the limitations. And I think we also need to focus on long term planning in this country.
AnthonyMouse 6y ago
> The study compared countries that passed tax cuts in a specific year, such as the U.S. in 1982 when President Ronald Reagan slashed taxes on the wealthy, with those that didn't, and then examined their economic outcomes. All of these studies consistently miss one thing. Effective tax rates haven't really changed since before Reagan. Prior to Reagan, the tax code was riddled with loopholes. Not like how it is now where corporations do this and that, but much worse. Rich individuals were just deducting everything they buy from their taxes. The Reagan "tax cuts" did two things. One, they closed a lot of those loopholes. Two, they significantly lowered nominal rates. The two things basically canceled out. There was never any meaningful reduction in government revenue.
- gumby 6y ago
  They did a third thing which was to make the tax system more regressive. That was by deliberate design: there is a specific argument for it going back to Burke at least. I strongly disagree with it but I understand the argument.
  - AnthonyMouse 6y ago
    Whether or not that was their stated intent, it isn't what they actually did. Here's the effective rate table going back to before Regan: https://www.taxpolicycenter.org/statistics/historical-average-federal-tax-rates-all-households https://www.taxpolicycenter.org/statistics/historical-averag... Not exactly huge differences before and after. And compare the recent effective rates to the ones at the start of the table. About the same for the top quintile, significantly lower for all the others. So we should be seeing a reduction in wealth inequality then, right? Or at worst it should stay the same, so why are we seeing the opposite? Obviously this doesn't prove that the thing that hasn't actually been tried would actually help, but it does point to the idea that maybe the problem lies somewhere else entirely. For example, lack of effective antitrust enforcement.
    - gumby 6y ago
      Those are the rate charts before deductions. Most deductions are meaningless at the low end of the income spectrum. Find a chart of % payment by quintile and you'll get a different picture. Apologies that I can't find one in a quick search before running to dinner but there was good work done by the NBER on this. Edit: by % payment by quintile I mean what percentage of total income is paid by each quintile, not what percentage of total taxes is paid by each one.
RcouF1uZ4gsC 6y ago
> Julian Limberg, a co-author of the study and a lecturer in public policy at King's College London, said in an email to CBS MoneyWatch. "In fact, if we look back into history, the period with the highest taxes on the rich – the postwar period – was also a period with high economic growth and low unemployment." You can't really compare the present time to the post-war period, especially in the case of the United States. Basically, post-war USA had a monopoly in industrialization. Great Britain, France, Germany, USSR, Japan had all had their industry literally blown up. China had undergone a huge civil war and invasion and occupation by the Japanese. India was just emerging from centuries of British colonialism which basically exploited its natural resources. In addition, in the USA there was rampant and overt discrimination and harassment against women. There was open racism and segregation. So if you were a white male, your skills were desperately needed as the US now supplied the industrial output for a huge chunk of the world's population. Even in Europe, a generation of males had been killed in two world wars. There was a huge labor shortage. And especially for Western Europe, with the Marshall Plan, the US was pumping in loads of cash to enable industrialization to face a perceived Soviet threat. It all came together to create a very high demand on labor, and as such allowed labor to claim a high proportion of the value generated. Those were the days where you could have one man with a high school education, support an entire family in middle class lifestyle with a detached house and yard. Those post-ware days are long gone, and no tax policy will bring them back. The rest of world is industrializing. Globalization is happening with the world getting flatter. A larger percentage of the population is entering the work force.
- jacques_chester 6y ago
  The study looked at many countries, not just the USA.
wffurr 6y ago
Frustrating that CBS couldn't be bothered to link the actual paper: http://eprints.lse.ac.uk/107919/1/Hope_economic_consequences_of_major_tax_cuts_published.pdf http://eprints.lse.ac.uk/107919/1/Hope_economic_consequences... A better link might be London School of Economics' press release: https://www.lse.ac.uk/News/Latest-news-from-LSE/2020/L-December/Tax-cuts-for-the-rich https://www.lse.ac.uk/News/Latest-news-from-LSE/2020/L-Decem...
gt565k 6y ago
They did trickle down, to the highest valuations of companies, leading edge technology, and high stock prices. If you're a middle class american without a brokerage / investment account. You are getting shafted. Immigrants in the USA are especially risk averse when it comes to investing in the stock market, because the countries they come from are corrupt and they have been screwed in the past. It's amazing how many Americans with the means to invest in the market, would rather eat out every day, buy a new car and iphone every 1-2 years, drown in debt, and fail to reap the rewards of capitalism. Not investing in companies through the stock market is the very definition of not taking advantage of the capitalistic society we live in. K-12 education in the US should have a mandatory course on the financial market and educate people about the tax advantaged accounts available to them. Of course, this is like the government pouring gasoline on its own fire, so it will never happen. Why? Because the govt has no incentive to help you reduce your tax burden, while reducing their tax revenue. People don't have a clue about 401k, HSA, Roth IRA, Back-door Roth IRA, 529 college savings accounts, student interest deductions, brokerage accounts and capital gains tax, and the advantages of each. Credit is horrible to the financially illiterate consumer, but is empowering to those that understand economics and capitalism, avoid consumerism, and understand how to invest capital and make a return.
dang 6y ago
https://news.ycombinator.com/item?id=25440832 https://news.ycombinator.com/item?id=25440832
beloch 6y ago
Naive question: When talking about taxes on the wealthy, the metrics people seem to really care about are employment rates and wages for people the wealthy employ. So why not increase tax rates on the wealthy significantly, close loopholes, and then introduce big tax credits for every head employed and every dollar spent on employee salaries? i.e. Instead of slashing taxes so the rich have more money and then hoping that they will spend it on their employees, incentivize the desired behaviour directly.
Zenst 6y ago
The way to solve TAX is to tap into the spending more than the earning. Can only triage the TAX system and at least raise the threshold before paying TAX and tap into the expenditure with the taxes upon the niceties in life that the rich gravitate towards. Also trickle down thinking just needs to see how water trickles down when the rich have their own underground pipe network to catch it all. Tree economics would be a more apt term for what we have as like a large tree, you have a root system holding that up and yet nobody see's the roots until the tree has fallen. Bit like the fallout when some large company goes bust, same with small ones at scale. TAX cuts via rate changes should really of taken a back seat and raising TAX thresholds would of been the better approach. Raise the bar and do tax cuts that way.
gutino 6y ago
The article is fundamentally wrong, the only way whealth would not trickle down is if the rich will bury their money or destroy it. Think about it: > When the rich buys a Yat, cars, houses, vacation, -> give money to those who produces those goods/services. > When the rich saves money, typically it does through financial instruments, which we use it to fund our projects, home, buys etc. > A great portion of the whalth is working capital which are used for all the employes that work with them, producing earning for everyone. > Many billionaires have stock valued in billions but those stocks if they are sold by them, will get them lower the value. The concept of ownership does not mean that other can not use it. The real question is what % of the whealth is EXCLUSIVELY used by the rich
apta 6y ago
High taxation is a symptom of a broken economic system. Taken from my post on the other thread. > The problem lies elsewhere, but no one seems to discuss it. It's not for no reason that Islam, Judaism, and Christianity prohibit lending money with interest. We look around us and see a debt heavy and debt ridden society. The modern usurious economic system is inherently going to favor the rich. Ban interest and other usurious immoral and parasitic practices (e.g. stock shorting) and things will improve quickly.
lumberingjack 6y ago
I work for the uber wealthy trickle down directly affects me and actually works for my business we always notice an uptick in jobs and work whenever the economy is doing great which is usually directly affected by how much our clients are being taxed.
ftr45 6y ago
surprisedpichaku.jpg
mrlonglong 6y ago
Maybe they should make a law if the rich gets tax cuts they must pass it on to the ones at the bottom.

134 points by NiceWayToDoIT 6y ago

isoblvck 6y ago

no shit....

nickthemagicman 6y ago
Haha came to say the same thing. File this revelation under the no shit category.

mikestew 6y ago

Perhaps I'm having a Mandela Effect moment, but hasn't "trickle down" been debunked before this study...repeatedly? Not just "no shit", but actual studies and stuff? Regardless, Will Rogers is credited with the phrase "trickle down" to refer to supply-side economics, so it has gone on longer than 50 years. Mr. Rogers also did not mean the turn of phrase to be complimentary.

Someone 6y ago
Indeed. Wikipedia (https://en.wikipedia.org/wiki/Trickle-down_economics https://en.wikipedia.org/wiki/Trickle-down_economics) say he used it in 1932, and says the idea is even older (“leak through” in 1896; “If you feed the horse enough oats, some will pass through to the road for the sparrows.” in the 1890s)
- mikestew 6y ago
  “If you feed the horse enough oats, some will pass through to the road for the sparrows.” Boy, an accurate assessment of supply-side economics if there ever was one: "let the plebs pick through our shit to see if we left any excess for them".
- commandlinefan 6y ago
  > If you feed the horse enough oats, some will pass through to the road for the sparrows Funny enough in that analogy: you're feeding the horse because you care about its well-being and it's doing something helpful in return, whereas the sparrows are actually a nuisance providing no value to anybody and just taking without giving anything in return.
  - rbanffy 6y ago
    It's a good analogy. The rich don't care about the sparrows.
  - tsdlts 6y ago
    As Mao Zedong learned late in his life, sparrows do actually provide value.
pmiller2 6y ago
It has, but half the country still hasn't gotten that message.
- ardy42 6y ago
  > It has, but half the country still hasn't gotten that message. That's at least partially because the wealthy have the means to hire lots of smart people to create sophisticatedly misleading propaganda for them, and make sure it's widely disseminated and influential.
  - Florin_Andrei 6y ago
    Social media may turn out to be part of the explanation for the Great Filter.
    - rbanffy 6y ago
      When I see social media I remember the Krell Big Machine in Forbidden Planet. We built something that brings out our worst demons.
imtringued 6y ago
It's just an excuse to justify selfish tax policy that favors the wealthy. It obviously doesn't work because the wealthy don't have to invest into domestic jobs. They can also use their money abroad. If you give them more money they are just going to spend more of it outside your country. The opposite is also true. The vast majority of consumers spend their money domestically. Yes the products they buy are often imports but in many cases a big chunk of the money goes to cashiers, delivery drivers and so on. Of course I am simplifying this a bit. In theory the roles can switch and business owners spend more domestically and consumers spend more abroad but as it is right now the rich just invest into Chinese businesses or production capacity in China. Think of companies like Tesla building factories in China.
- pmoriarty 6y ago
  "It obviously doesn't work because the wealthy don't have to invest into domestic jobs. They can also use their money abroad." They can also just hoard most of it and pass it on to their descendants -- this is how you get dynasties. Tax havens and creatively constructed foundations are another way of making sure the government never gets ahold of their money.
  - 0x6862 6y ago
    Sure the rich hold some gold & BTC but most of their wealth is in investments (stocks, bonds, infrastructure etc.) to generate positive real returns - given inflation. This is far from hoarding
    - jacques_chester 6y ago
      What the paper shows is that the increment in potential investments by the wealthiest don't seem to improve growth, but does worsen inequality. The individually wealthy are not required for the aggregation and allocation of capital. Governments and financial systems are typically more capable at achieving this requirement in a welfare-maximising manner.
- throwaway894345 6y ago
Florin_Andrei 6y ago
> hasn't "trickle down" been debunked before this study...repeatedly? Not just "no shit", but actual studies and stuff? Regardless, it's still the central dogma of the politics of a large part of population.
- rbanffy 6y ago
  We desperately need to educate these people because they'll continue to vote against theirs and our interests.
throw0101a 6y ago
> Perhaps I'm having a Mandela Effect moment, but hasn't "trickle down" been debunked before this study...repeatedly? The idea has been around in some form or another for a long time: * https://en.wikipedia.org/wiki/Trickle-down_economics#History_and_usage https://en.wikipedia.org/wiki/Trickle-down_economics#History... The most recent reincarnation was known to be not very good economics from the get-go: > What I want to talk about is when, exactly, the GOP went over the edge. Obviously it didn’t happen all at once. But I think the real watershed came in 1980-81, when supply-side economics became the party’s official doctrine. > I’m not sure, even now, whether people who aren’t involved in economic policy discussion understand that supply-side wasn’t a doctrine like monetarism or even real business cycles — ideas I may think are wrong, but which had and to some extent still have significant support from professionals in the field. Supply-side economics never had any evidence behind it; it never had any support in academic research; it barely even had any support among economic researchers and forecasters in the business world. It was and remains crank economics pure and simple, with nothing going for it except political convenience. > Yet 35 years ago the GOP was already willing to embrace this doctrine because it was politically convenient, and could be used to justify tax cuts for the rich, which have always been the priority. > And given this, why should anyone be surprised at all the reality denial and trashing of any kind of evidence that followed? You say economics is a pseudo-science? Fine. First they came for the economists; then they came for the climate scientists and the evolutionary biologists. * https://krugman.blogs.nytimes.com/2016/07/18/the-gops-original-sin/ https://krugman.blogs.nytimes.com/2016/07/18/the-gops-origin... He has an entire section on this in this recent book Arguing with Zombies, along with how the GOP are worried about deficits and debts when they're out of office, but then don't once they're in power (e.g., tax cuts in the December 2017 budget): * https://wwnorton.com/books/9781324005018 https://wwnorton.com/books/9781324005018 * https://www.worldcat.org/title/arguing-with-zombies-economics-politics-and-the-fight-for-a-better-america/oclc/1134536617 https://www.worldcat.org/title/arguing-with-zombies-economic...
Diederich 6y ago
George Bush, Sr., characterized Reagan's economic paradigm (Reagonomics/supply side/trickle down/etc) as "Voodoo economics": http://news.bbc.co.uk/2/hi/americas/270292.stm http://news.bbc.co.uk/2/hi/americas/270292.stm https://www.youtube.com/watch?v=o8hnM6xNjeU https://www.youtube.com/watch?v=o8hnM6xNjeU
partiallypro 6y ago
"Trickle down" is an economic slur, it's not something economists believe. It's just what some people call a certain policy set.
- jariel 6y ago
  The term they use is 'supply side' economics - meaning, you support businesses with tax cuts, subsidies, Quantitative Easing, then the 'core' economic mechanisms are healthy, people get hired (i.e. trickle down). As oppose to 'demand side' i.e. give tax cuts or money to the poor - they spend it, the economy grows.
  - 0x6862 6y ago
    You forgot the big one - regulation. Supply side is about making it easier for people to produce. You won’t find many free market types supporting QE and subsidies. Would you rather live in a world where there’s only 1 large firm because over regulation has created a high barrier to entry and little incentive to risk starting a competitor, or a world with many firms where it’s easy for people to compete and they’re incentivised to do so?

pkaye 6y ago

Wouldn't trickle up economics work better? Poor people have more unmet needs and more likely to spend any extra they get into the economy.

FilterSweep 6y ago
That’s effectively what Nick Hanauer has been saying more recently but I believe we are too far gone at this stage.
- Florin_Andrei 6y ago
  > I believe we are too far gone at this stage When irrationality and straight-up lying are so entrenched, you wonder what it would take to shake up the system. The only thing I see is some major catastrophe, like a meteor strike or something on that scale.
  - takishan 6y ago
    I think we are seeing the slow disintegration of the system as we speak with the pandemic. Or rather, we are seeing an acceleration in the slow disintegration that was already happening. The rise of the populist right all over the world is a troubling sign of things to come. The people are not content. Look at the BLM protests in the US, they were the largest uprising in American history. They were bigger than the MLK riots. Content people do not riot. Needs are not being met, or at least perceived needs are not being met.
  - sjg007 6y ago
    The pandemic should've been enough but... meh.
- redisman 6y ago
  The US government is very capable of handing out $1200 checks to everyone as we have seen. It is also extremely popular with the people. I mean I guess the only impediment is courageous politicians but that might be a large obstacle. I wonder if they gave out the $1200 checks every year and funded it by taxing the top brackets, that would cause a large surge in consumer spending (mostly on essentials but also on luxury goods as you go up the income bracket).

hilbert42 6y ago

This fact was obvious long before 50 years ago! For starters, just go back to Marx and Engels in the 1840s. The longstanding problem with that trickle down argument is and has always been that the rich have always had the money to: (a) effectively lobby politicians into accepting that viewpoint, and or (b) becoming politicians thus enabling them to enact laws that benefit themselves directly, and (c) to purge or whitewash arguments/statements to this effect from history (such as my comment here) by the effective use of propaganda. Ordinary people simply don't have the financial resources to effectively counter these self-serving actions. It really is time we stopped mucking about and called this economic nonsense for what it really is—a charade or justification that only fools the gullible. For instance, we could begin by abandoning the Nobel Prize for economics, this would bring the artificially-propped-up status of the Milton Friedmans of this world back down to earth.

AnimalMuppet 6y ago
And the Paul Krugmans.
- hilbert42 6y ago
  Yeah, unfortunately that whole trade matter got well out of hand before any of us realized it.

NiceWayToDoIT 6y ago

This is not a new thing for those who are fighting for better wealth distribution, but despite raising many voices in UK, politicians who create policies still use the same excuse to pump huge amounts of cash to the rich people. In that regards maybe this study is an important step toward change.

eloff 6y ago

I'm really curious how many of our democracies fail in this specific case. There aren't a lot of wealthy people, so if politicians are pandering to the majority, this is the wrong call. It's well known not to work for a long time, so logically it's also the wrong call. Are most politicians wealthy? Is that why they seem to overly protect the interests of this group over the rest of the population? Straight up self-interest or corruption?

slindz 6y ago
From my perspective, it costs an awful lot of money to run for office. If the only way to reach office is to convince wealthy people to fund your campaign, it shouldn't be a surprise if their interests wind up getting preferred treatment.
- Florin_Andrei 6y ago
  The way church and state are supposed to be separate (lots of potential comments here, but let's move on), we should have a separation of money and politics. And for reasons that are quite similar. It's a public office, where public servants work, for the good of everyone, not for personal enrichment. It's a job just like all the others. It should not be a place where oceans of cash keep sloshing around. No more lobbying. No more private funding of politics.
  - souprock 6y ago
    That thinking led to the corruption. Any normal senator, governor, or president has the skills to work at a high level in corporate America. That pays better, counting only the legitimate pay. It should be no surprise that voters are seldom able to hire (elect) anybody non-corrupt. We aren't paying market rate for the desired skills or for the level of responsibility. Senators get about $200,000 and the president gets about $400,000. At an S&P 500 company, CEO pay is about $15,000,000 on average. Elon Musk gets around $595,000,000. Tim Cook gets around $133,000,000. Sundar Pichai gets around $280,000,000. Satya Nadella gets around $77,000,000. None of those CEOs have responsibility for tariffs, military operations, hundreds of millions of people, thousands of nuclear weapons, or over 10 million employees. You get what you pay for. Proper pay: The senate splits 0.1% of GDP, the house splits 0.1% of GDP, the supreme court splits 0.1% of GDP, and the president gets 0.1% of GDP. Lump the VP in with the senate, probably. That totals 0.4% of GDP for the whole group.

sunstone 6y ago

It did trickle down but to China, Vietnam, Indonesia and Silicon Valley.

safetyengineer 6y ago
It's mind boggling to see people embracing protectionism in 2020. We are doomed to repeat history.

konfusinomicon 6y ago

Now that the rich are used to lower taxes, if the government raises them won't the extra costs they incur just end up being passed down to the consumer via higher cost of goods/services from the businesses owned by said rich people?

aaomidi 6y ago
This is a good thing. In fact if this reduces consumption because higher priced we've won a major battle. However wages have stagnated, which means whatever we've done so far hasn't helped consumers at the end. So at this point I'd take lower consumption as a win.
baron_harkonnen 6y ago
Assuming that simple model was correct, wouldn't that then mean that in order for the consumer to be able to afford such goods and services the would, in turn, have to be paid more? It's not like the American consumer is a tremendous store of surplus value, especially given that they have effectively no saving on average and rising debt. If the wealthy conspire to charge more because of income lost to taxes, then the labor class will simply have to consume less or somehow make more. As far as the former goes, historically capitalism doesn't do great when it decreases the material conditions of workers (which is what forcing decreased consumption leads to).
standardUser 6y ago
You can't just charge more because you're mad and want more money, at least not if you expect to continue to be competitive.
- bearjaws 6y ago
  Good point. The teaching of supply vs demand vs cost of production has really let our society down recently. Very few people seem to be aware that non-essential items are priced based upon what people are WILLING to pay for it, not what it costs to produce. This results in comments like "well the price for XYZ will just go up!", when in reality its much more complicated.
6y ago

safetyengineer 6y ago

It should be pointed out, the rich does not refer to the 1-10%ers as many HN visitors are. It refers to the ~0.01%. I'm sure many of us are unhappy about losing the SALT Deduction under Trump.

durnygbur 6y ago

The rich prefer to hire armies of accountants and lawyers to design the most hermetic pipeline funelling out everything they consider to be an excess. There is not a single droplet dropping, how could anything tricke down?

johndevor 6y ago
Cars, computers, cell phones, rockets to mars, etc... all exist because rich people bought the super expensive first versions or funded their development. We all benefit from those things greatly.
- pwinnski 6y ago
  You seem to radically misunderstand the history of cars, computers, and cell phones, and I fail to see how we're all benefiting from rockets to mars--which don't yet exist--at this time.
  - dwaltrip 6y ago
    It is true that many innovative developments occur from well-off people funding or buying the initial versions. But it is ridiculously absurd to assert that all developments or even most come from this.
    - pwinnski 6y ago
      Agreed! Innovation via excess wealth seems like one of the most inefficient possible means of innovation. It happens, but it is by no means necessary.
- bearjaws 6y ago
  A lot of early model cars were very affordable, the first iPhone was $600, nobody who is poor has concerns with Mars... This really isn't a compelling case.
- bovermyer 6y ago
  That's false equivalence. The luxury goods market does not equate to the general economy, nor wealth distribution.

11thEarlOfMar 6y ago

This is only tangentially on topic, but I genuinely wonder about this. When people state that they want the wealthy to pay their fair share, the first two questions I have are, what constitutes wealthy and what constitutes fair? Let's take a specific person as an example of wealthy (let me know if you don't agree), and I'd be grateful to hear your thoughts: Wealthy Person X: - CEO, 55 years old, University of Illinois grad in bio-chemistry, put self through college working - Works 60 hour weeks, most Saturdays, some Sundays - $1,500,000 salary + stock benefits - Net worth $8,000,000 What is X's fair share in Federal Income Tax?

t-writescode 6y ago
Ignoring edge cases like selling a house, I would argue ‘fair share’ is for capital gains tax to have brackets that eventually equal regular income tax brackets, such that a CEO that makes $1 / year and 4 million in stocks, if he sells all 4 million in stocks 2 years later, isn’t paying only 15% income tax.
- dlp211 6y ago
  Your base point is valid, your example is at best incomplete. Stock compensation is taxed as regular income. The appreciation of the stock afterwards would be taxes as cap gains.
  - t-writescode 6y ago
    Yes, you're right. I admit I had completely forgotten about that.
soared 6y ago
This doesn’t seem like a question inviting genuine discussion. Tax laws don’t take into account how hard someone works, where they went to school, or a taxpayers character. Unless your argument is that taxes should be based on factors outside of income/etc, it seems like you might be trying to bait people with some version of “Look how hard Steve works - you can’t possibly support raising taxes on him.”

zthrowaway 6y ago

This will not be a popular thing to point out, but trickle down theory was never an actual theory. As far as I understand nobody actually advocates for this theory on a serious level. Plenty of contemporary economists such as Joseph Stiglitz, Alan Blinder, and Paul Krugman denounce this as a non-existant theory.

rbanffy 6y ago
Politicians who use it to justify self-serving policies are not well reputed economists, but still define fiscal policies based on flawed economic ideas.
standardUser 6y ago
Isn't "trickle down" just a politicized label for supply-side economics?
jonathankoren 6y ago
You're looking in the wrong place. It's proponents call it "supply side economics". It is a discredited theory, but it is still popular idea among many serious people in public policy. If you want want a name of one (in)famous proponent, I'll give Arthur Laffer, inventor of the Laffer Curve. The curve says that as tax rates fall, government income goes up due to economic growth. You may have heard of this as, "Tax cuts pay for themselves." He famously invented the curve while drawing on a napkin. The napkin is now housed at the Smithsonian.

exabrial 6y ago

That's because the problem is Taxation, not tax cuts, not the rich. If the USA Government was on Charity Navigator, it'd have a 0 star rating for overhead and delivery. I'm 100% for gutting taxes until we measure results with what we spend. Every business measures their spend for efficiency and every financially savvy person also calculates the rate of return. Why we willy-nilly throw gazillions of dollars at the government to watch it being funneled into your Senator's Buddy's pocket is beyond me. If we're going to tax, the first step should be how to we measure the results.

inthewoods 6y ago
I broadly agree with you but measuring the results of some initiatives strikes me as very challenging. Two examples jump to mind. I remember reading about early childhood education investments. When the program was completed they saw no measurable results so the program was cut. Researchers picked up the study years later and did follow-up and found dramatic improvements in the children that were a part of the program. Now if the measurement endpoint was set to the 2nd point, the program would have been viewed as a success, but we have, as a country, an incredibly short term view. It would be extremely challenging to find anyone in the US government that would have invested in the program if they were told the results wouldn't be known for 40 years (positive or negative). The second example is military spending. This spend is done to keep us "safe" (others would argue it has other purposes e.g. to fund the military industrial complex or as a tool for stimulus). But if we take it at face value that military spend is supposed to keep us safe, what would be the measurable goal? I get the need for goals, but I think you need to understand the limitations. And I think we also need to focus on long term planning in this country.

AnthonyMouse 6y ago

> The study compared countries that passed tax cuts in a specific year, such as the U.S. in 1982 when President Ronald Reagan slashed taxes on the wealthy, with those that didn't, and then examined their economic outcomes. All of these studies consistently miss one thing. Effective tax rates haven't really changed since before Reagan. Prior to Reagan, the tax code was riddled with loopholes. Not like how it is now where corporations do this and that, but much worse. Rich individuals were just deducting everything they buy from their taxes. The Reagan "tax cuts" did two things. One, they closed a lot of those loopholes. Two, they significantly lowered nominal rates. The two things basically canceled out. There was never any meaningful reduction in government revenue.

gumby 6y ago
They did a third thing which was to make the tax system more regressive. That was by deliberate design: there is a specific argument for it going back to Burke at least. I strongly disagree with it but I understand the argument.
- AnthonyMouse 6y ago
  Whether or not that was their stated intent, it isn't what they actually did. Here's the effective rate table going back to before Regan: https://www.taxpolicycenter.org/statistics/historical-average-federal-tax-rates-all-households https://www.taxpolicycenter.org/statistics/historical-averag... Not exactly huge differences before and after. And compare the recent effective rates to the ones at the start of the table. About the same for the top quintile, significantly lower for all the others. So we should be seeing a reduction in wealth inequality then, right? Or at worst it should stay the same, so why are we seeing the opposite? Obviously this doesn't prove that the thing that hasn't actually been tried would actually help, but it does point to the idea that maybe the problem lies somewhere else entirely. For example, lack of effective antitrust enforcement.
  - gumby 6y ago
    Those are the rate charts before deductions. Most deductions are meaningless at the low end of the income spectrum. Find a chart of % payment by quintile and you'll get a different picture. Apologies that I can't find one in a quick search before running to dinner but there was good work done by the NBER on this. Edit: by % payment by quintile I mean what percentage of total income is paid by each quintile, not what percentage of total taxes is paid by each one.

RcouF1uZ4gsC 6y ago

> Julian Limberg, a co-author of the study and a lecturer in public policy at King's College London, said in an email to CBS MoneyWatch. "In fact, if we look back into history, the period with the highest taxes on the rich – the postwar period – was also a period with high economic growth and low unemployment." You can't really compare the present time to the post-war period, especially in the case of the United States. Basically, post-war USA had a monopoly in industrialization. Great Britain, France, Germany, USSR, Japan had all had their industry literally blown up. China had undergone a huge civil war and invasion and occupation by the Japanese. India was just emerging from centuries of British colonialism which basically exploited its natural resources. In addition, in the USA there was rampant and overt discrimination and harassment against women. There was open racism and segregation. So if you were a white male, your skills were desperately needed as the US now supplied the industrial output for a huge chunk of the world's population. Even in Europe, a generation of males had been killed in two world wars. There was a huge labor shortage. And especially for Western Europe, with the Marshall Plan, the US was pumping in loads of cash to enable industrialization to face a perceived Soviet threat. It all came together to create a very high demand on labor, and as such allowed labor to claim a high proportion of the value generated. Those were the days where you could have one man with a high school education, support an entire family in middle class lifestyle with a detached house and yard. Those post-ware days are long gone, and no tax policy will bring them back. The rest of world is industrializing. Globalization is happening with the world getting flatter. A larger percentage of the population is entering the work force.

jacques_chester 6y ago
The study looked at many countries, not just the USA.

wffurr 6y ago

Frustrating that CBS couldn't be bothered to link the actual paper: http://eprints.lse.ac.uk/107919/1/Hope_economic_consequences_of_major_tax_cuts_published.pdf http://eprints.lse.ac.uk/107919/1/Hope_economic_consequences... A better link might be London School of Economics' press release: https://www.lse.ac.uk/News/Latest-news-from-LSE/2020/L-December/Tax-cuts-for-the-rich https://www.lse.ac.uk/News/Latest-news-from-LSE/2020/L-Decem...

gt565k 6y ago

They did trickle down, to the highest valuations of companies, leading edge technology, and high stock prices. If you're a middle class american without a brokerage / investment account. You are getting shafted. Immigrants in the USA are especially risk averse when it comes to investing in the stock market, because the countries they come from are corrupt and they have been screwed in the past. It's amazing how many Americans with the means to invest in the market, would rather eat out every day, buy a new car and iphone every 1-2 years, drown in debt, and fail to reap the rewards of capitalism. Not investing in companies through the stock market is the very definition of not taking advantage of the capitalistic society we live in. K-12 education in the US should have a mandatory course on the financial market and educate people about the tax advantaged accounts available to them. Of course, this is like the government pouring gasoline on its own fire, so it will never happen. Why? Because the govt has no incentive to help you reduce your tax burden, while reducing their tax revenue. People don't have a clue about 401k, HSA, Roth IRA, Back-door Roth IRA, 529 college savings accounts, student interest deductions, brokerage accounts and capital gains tax, and the advantages of each. Credit is horrible to the financially illiterate consumer, but is empowering to those that understand economics and capitalism, avoid consumerism, and understand how to invest capital and make a return.

dang 6y ago

https://news.ycombinator.com/item?id=25440832 https://news.ycombinator.com/item?id=25440832

beloch 6y ago

Naive question: When talking about taxes on the wealthy, the metrics people seem to really care about are employment rates and wages for people the wealthy employ. So why not increase tax rates on the wealthy significantly, close loopholes, and then introduce big tax credits for every head employed and every dollar spent on employee salaries? i.e. Instead of slashing taxes so the rich have more money and then hoping that they will spend it on their employees, incentivize the desired behaviour directly.

Zenst 6y ago

The way to solve TAX is to tap into the spending more than the earning. Can only triage the TAX system and at least raise the threshold before paying TAX and tap into the expenditure with the taxes upon the niceties in life that the rich gravitate towards. Also trickle down thinking just needs to see how water trickles down when the rich have their own underground pipe network to catch it all. Tree economics would be a more apt term for what we have as like a large tree, you have a root system holding that up and yet nobody see's the roots until the tree has fallen. Bit like the fallout when some large company goes bust, same with small ones at scale. TAX cuts via rate changes should really of taken a back seat and raising TAX thresholds would of been the better approach. Raise the bar and do tax cuts that way.

gutino 6y ago

The article is fundamentally wrong, the only way whealth would not trickle down is if the rich will bury their money or destroy it. Think about it: > When the rich buys a Yat, cars, houses, vacation, -> give money to those who produces those goods/services. > When the rich saves money, typically it does through financial instruments, which we use it to fund our projects, home, buys etc. > A great portion of the whalth is working capital which are used for all the employes that work with them, producing earning for everyone. > Many billionaires have stock valued in billions but those stocks if they are sold by them, will get them lower the value. The concept of ownership does not mean that other can not use it. The real question is what % of the whealth is EXCLUSIVELY used by the rich

apta 6y ago

High taxation is a symptom of a broken economic system. Taken from my post on the other thread. > The problem lies elsewhere, but no one seems to discuss it. It's not for no reason that Islam, Judaism, and Christianity prohibit lending money with interest. We look around us and see a debt heavy and debt ridden society. The modern usurious economic system is inherently going to favor the rich. Ban interest and other usurious immoral and parasitic practices (e.g. stock shorting) and things will improve quickly.

lumberingjack 6y ago

I work for the uber wealthy trickle down directly affects me and actually works for my business we always notice an uptick in jobs and work whenever the economy is doing great which is usually directly affected by how much our clients are being taxed.

ftr45 6y ago

surprisedpichaku.jpg

mrlonglong 6y ago

Maybe they should make a law if the rich gets tax cuts they must pass it on to the ones at the bottom.