The thing I don't like about this is that it treats trickle-down economics as if it's something that needs to be debunked. Trickle-down economics has never been a real economic policy, and never been seriously advocated by federal policy-makers. It is an entirely pejorative term created by detractors of supply-side economics.
The policies of supply-side economics, however, are much more defensible, but it seems people would much rather pick on the strawman.
When half the country has believed something for close to a half a century, across multiple generations, you bet your ass it needs to be debunked. The fallacy of the "precious job creators" is as American as "pulling yourself up by your bootstraps"
The fact that you and I were not dumb enough to fall for it doesn't really help anyone in the grand scheme of things. There's still an insane amount of work left in educating the public, and we may even be regressing at this point.
> When half the country has believed something for close to a half a century, across multiple generations, you bet your ass it needs to be debunked.
It dates back to the late 1890s (and has been criticized since then):
> In 1896, United States Democratic presidential candidate William Jennings Bryan claimed in his Cross of Gold speech that his opposition based their policies on the idea that the success of the rich would "leak through" to the lower classes, stating: "There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below."[8][9][10]
> In 1932, humorist and social commentator Will Rogers wrote a column criticizing Herbert Hoover's policies and approach to The Great Depression and stated: "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot."[11] In 2007, political commentator William J. Bennett credited Rogers for coining the term "trickle down" and observed its persistent use throughout the decades since.[12]
So you're saying that when the Fox News talking head drags out the Laffer Curve to smuggle into the conversation the assumption that the next round of tax cuts for billionaires will unleash enormous economic growth that net-benefits everyone, he doesn't believe what he's saying?
Maybe they don't believe in "trickle-down economics", they same way the do believe that "CRT and DEI are bad". They certainly believe that lowering tax rates raises revenue collected, that's an article of faith. I've see ex-Congressman Joe Walsh advocate for that viewpoint within the last year.
> No one believes in trickle-down economics. As GP said, it's a pejorative straw man invented by its opponents.
Except the folks that implement it:
> The cuts were based on model legislation published by the conservative American Legislative Exchange Council (ALEC),[8][9][10][11] supported by supply-side economist Arthur Laffer,[12] anti-tax leader Grover Norquist,[13] and the influential industrialists Charles and David Koch.[14][15]
The term was invented by its opponents, but it was a label that was put on actual policies, like Hoover's:
> In 1932, humorist and social commentator Will Rogers wrote a column criticizing Herbert Hoover's policies and approach to The Great Depression and stated: "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot."[11] In 2007, political commentator William J. Bennett credited Rogers for coining the term "trickle down" and observed its persistent use throughout the decades since.[12]
And Reagan's:
> Ronald Reagan launched his 1980 campaign for the presidency on a platform advocating for supply-side economics. During the 1980 Republican Party presidential primaries, George H. W. Bush had derided Reagan's economic approach as "voodoo economics".[16] Following Reagan's election, the "trickle-down" reached wide circulation with the publication of "The Education of David Stockman", a December 1981 interview of Reagan's incoming Office of Management and Budget director David Stockman, in the magazine Atlantic Monthly. In the interview, Stockman expressed doubts about supply side economics, telling journalist William Greider that the Kemp–Roth Tax Cut was a way to rebrand a tax cut for the top income bracket to make it easier to pass into law.[17] Stockman said that "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."[17][18][19] Reagan administration officials including Michael Deaver wanted Stockman to be fired in response to his comments, but he was ultimately kept on in exchange for a private apology.[20]
What they said is grossly dishonest, disingenuous, and incoherent. "pejorative straw man" is nonsensical. "trickle down economics" is, by your own accounting, a pejorative term for "supply side economics", but they refer to the exact same thing, and it's the thing that TFA argues only helps the rich. And since people do "believe in" supply side economics, they believe in trickle down economics since that is the exact same thing but given a name that is pejorative (and rightly so).
Neither of you has or can offer any defense of the policies that go by either name, or a rebuttal of TFA.
I have a thing about bad faith or such inept argumentation that it appears to be, so I won't respond further.
Can I extend an olive branch anyways? I really believe in good faith, civil conversation, and I'd love the opportunity to make amends here.
You've said you won't respond further, but seeing your passion, I think it would be great if we could have a civil conversation. I genuinely believe that trickle-down and supply-side economics are meaningfully different things, and I think there would be much to gain from hearing your perspective in more detail.
My thesis boils down to the fact that supply-side economics (say for example, something like small business tax credits) often gets conflated with trickle-down economics undeservedly. Trickle-down policy--take money from the poor and give it to the rich indiscriminately--is an objectively horrible idea, but I would say also that nobody is seriously arguing for that sort of thing.
There are supply side policy arguments that make sense.
But that's separate from the linked article, which was a discussion of an empirical paper that claims to find evidence that "tax cuts for the wealthy only benefit the rich"
A good faith way of addressing the argument would have been to look at examples where evidence appears to contradict this, or potential flaws in the academic paper, rather than dismiss the idea that supply siders believe that tax cuts for the wealthy benefit more than just the rich based on a label used in a blog headline...
(GP, in this context, refers to the "grandparent" comment upthread)
My problem is not the article saying that tax cuts for the wealthy are bad. Although this moves us into normative territory, I'd actually personally agree that tax cuts for the wealthy are not we need.
But my problem is that "take from the poor and indiscriminately give to the rich" is a mischaracterization of supply-side economics.
I'll pick up the conversation if GP won't (GP = grand parent, your post is the parent of mine and the post above is the grandparent of mine).
You're missing the forest for the trees. I argue that the forest is a high level strategy that has been playing out for approaching 50 years:
1. Push money into the capital economy and cut taxes. If anyone complains, cite growth.
2. Push taxes into the labor economy and cut benefits. If anyone complains, cite fiscal responsibility.
This doesn't necessarily show up to an egregious degree in any individual policy. I can think of a few examples but that's beside the point. If (1) and (2) are aggressively promoted and happen frequently while the invisible (3) and (4) -- capital pays taxes, labor gets benefits -- aren't and don't, then the net effect is intentionally and predictably and observably upwards re-distributive.
Furthermore, I don't buy the excuse that policy wonks don't understand this. Back in comparative government class, they taught us that Iran was a theocracy rather than a democracy not because it didn't do the rituals of electing leaders, but because a Council of Religious Experts got to select the candidates. You can have any color you want, as long as it is black (or Shia Muslim). In any case, the filter is the policy.
Between campaign finance and private ownership of media, it's no real surprise that in the US we have the policy filtering mechanism that allows (1),(2) and blocks (3),(4). Again, the filter is the policy, the same logic that makes Iran a theocracy shoves the US towards plutocracy, and we need to push back by shifting aggregate legislative attention away from (1), (2) and towards (3), (4) rather than getting bogged down in debates over whether any particular fig-leaf appropriately covers any particular penis.
From what I'm hearing, the argument you're making is that regardless of explicit policy goals, (1) and (2) implicitly further an agenda which has a similar end result to trickle-down economics, that being the "predictably and observably upwards re-distributive."
Now (1) and (2) as you mentioned, are broadly associated with the economic right in America. The usual narrative is that Republicans want to do (1) and (2) to concentrate more wealth among the rich, their reason for doing this being the trickle-down economics creed. There's two main problems with this narrative I see.
The first, is that (1) and (2) aren't strictly right or left. They can be bipartisan. The left--broadly associated with increased taxes on the rich, labor rights, and a bigger welfare state--despite its reputation, often engages with parts of (1) and (2). This is because (1) and (2) aren't strictly set. You can have parts of (1), or parts of (2), or mix-and-match, but presenting them as definitively joined is unfair.
Take the Inflation Reduction act from the Biden era, passed during a blue Congress. It invested heavily in renewable technologies--typically a left-wing endeavor--but wouldn't things like EV tax credits technically be considered corporate freebies, i.e. a bit of (1)? Or Trump's Working Families Tax Cut (the BBB), which although cut taxes for the rich, did genuinely expand the child tax credit and double the standard deduction--the opposite of (2). The point being that there's nuance in how you execute these policies.
The second problem I see with this narrative, is that policy goals are not the same thing as policy results. If legislation endeavors to solve a problem, but fails, it would be unfair to say that the legislation's purpose was to fail. While one could make the claim that (1) and (2) promote an upward redistributive, I don't think you can make the case that either the left or the right specifically aim for that.
This comes back to my central problem in this thread: trickle-down economics isn't a real policy. If you take purported aim of this caricature policy--taking money from the poor and indiscriminately giving it to the rich--nobody is seriously advocating for that. While you might think that that is what's broadly happening within the economy today, it's unfair to blame amalgamations of (1) and (2) policy and say that advocates of supply-side economics _want_ further inequality.
> Trickle-down economics has never been a real economic policy, and never been seriously advocated by federal policy-makers. It is an entirely pejorative term created by detractors of supply-side economics.
Well here is one of those federal policy-makers you say doesn't exist, a Republican congressman, advocating four years ago for trickle down economics and advocating for "...letting the free market - and yes, trickle down economics, which does work - actually flourish in the United States"
That's not serious advocacy as trickle-down economics isn't a policy that can be implemented. The policy associated with trickle-down economics is known as supply-side economics. Trickle-down economics is something created for a comedy bit to express, in a humorous way, why supply-side economics doesn't work. Even if you don't buy into the underlying message of the comedy routine and believe that supply-side economics does work, you still cannot implement that comedy routine as government policy. That... doesn't make any sense. Clearly that guy you refer to was performing his own comedy routine.
"Supply-side economics" is a technocratic rebranding of trickle-down economics, adding just enough nuance to force the draw rhetorically while advocating policy that is completely indefensible to anyone who has enough time to properly examine the nuance.
Again, "trickle-down economics" was created by Will Rogers. He was never a policy maker, just a comedian trying to tell funny stories. Nor did he accidentally create a policy in a 10 minutes of rambling standup routine. If you listen to the routine you will realize that he was talking about things that had already happened. He wasn't some kind of hidden political visionary.
We can accept that "supply-side economics" is a policy rebranding, but it is not a rebranding of "trickle-down economics". That is abundantly clear. There has never been a policy known as "trickle-down economics".
> We can accept that "supply-side economics" is a policy rebranding, but it is not a rebranding of "trickle-down economics".
Reagan's people would disagree:
> Ronald Reagan launched his 1980 campaign for the presidency on a platform advocating for supply-side economics. During the 1980 Republican Party presidential primaries, George H. W. Bush had derided Reagan's economic approach as "voodoo economics".[16] Following Reagan's election, the "trickle-down" reached wide circulation with the publication of "The Education of David Stockman", a December 1981 interview of Reagan's incoming Office of Management and Budget director David Stockman, in the magazine Atlantic Monthly. In the interview, Stockman expressed doubts about supply side economics, telling journalist William Greider that the Kemp–Roth Tax Cut was a way to rebrand a tax cut for the top income bracket to make it easier to pass into law.[17] Stockman said that "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."[17][18][19] Reagan administration officials including Michael Deaver wanted Stockman to be fired in response to his comments, but he was ultimately kept on in exchange for a private apology.[20]
No, no such thing, only a hundred spectacularly regressive tax, trade, and benefit decisions sold on promises of growth that would supposedly benefit everyone and then didn't. Totally different!
Since you clearly haven't finished listening to the full joke yet, I'll reveal the punchline: What you describe is what Rogers called "trickle up".
"Trickle-up economics" has never been formally used to refer to a policy either, but at least if you called it that we would understand what you are trying to say. "Trickle-down economics" doesn't even make sense beyond a device used to setup a joke. It is bizarre that you keep going there.
"Grow the pie" is the phrase used by proponents, because they understand that "trickle down" invites uncomfortable discussions about "are you sure this will actually help me" while the pie analogy cleverly makes this question difficult to talk about. But it's the same argument and everyone can see it.
Proponents of what? Growing the pie isn't going to convince anyone who has a small slice of anything. Maybe you've never seen a pie before, but no matter how much it grows by the angle of your slice remains the same. People don't care about how much absolute wealth they have. If they did they'd all be happy as even the peasants today are richer than the kings of yore. In reality, people are only concerned about having a smaller share of the total wealth than someone else. Those kings of yore, despite having less wealth, are still considered to have been better off as they held the large share of the pie.
No, cool tech does not make up for the ruinous cost of health care, housing, and education vs median wages. Maslow's Hierarchy still exists. A system that fails to deliver food and shelter for a reasonable number of worked hours at a reasonable and available job is still a failure no matter how cool the Big Screen TVs are.
So do %s/trickle-down/supply-side/g , then, if it's the term that's bothering you. Doesn't "debunking" trickle-down economics then, by extension, debunk supply-side economics? I'm not clear on the meaningful difference
I don't know regex, but to be clear: trickle-down economics and supply-side economics are very different things. I don't blame you for conflating them since they are intentionally very confusing.
One is a policy and the other is basically the name of a common criticism for that policy.
For example, the Cartesian circle does not refer to any of the many mathematical advancements Rene Descartes discovered. Instead, it's the name of a common criticism for an argument he made. You can think of it like that.
What's the actual difference, because you haven't actually supplied one. You've just said "They're different. One is a thing, and one is a criticism of a thing".
So, does the criticism not hold value? Because a large part of "supply-side economics", a term coined in the 70s, is reduction of taxes and regulations. With the idea that that extra capital will then be used to create jobs.
And if that is not what's happening, then I don't care about the semantics of whether or not "trickle-down" is the appropriate term of art to be applied here. The core concept of "giving rich people more money spurs job growth" is apparently false.
Tilting the scale towards capital is a good idea when capital is the limiting factor on economic growth. A dollar invested rather than consumed brings two dollars in a few years time. Here's the thing: this is only really true in developing economies because, well, they develop. Inevitably, the amount of available capital outgrows the available investment opportunities. Expected rates of return and interest rates fall. At this point, subsidizing capital is every bit as foolish as subsidizing demand in any other ~fixed supply market. However, the enormous incentive to pretend otherwise remains.
Foolish: policies that favor capital are good
Smart: let's check interest rates to see if policies that favor capital are good
You are right. I should be more forthright; I was answering elsewhere. Here's another comment I made that's relevant.
"""
I think supply-side economics deserves more nuance than simply thinking we need to make the tax rate arbitrarily low. The Laffer curve isn't the only thing you should look at, since where you tax can be just as important as how much you tax.
Take corporate taxes for example. If one were to advocate to get rid of corporate taxes, you might think that person unabashedly biased. What kind of person would want to give tax breaks to the richest people (corporations) when everyday people are the most in need of those kind of cuts, right?
But the reality is that when you tax corporations, that is one of the most economically damaging taxes you can do. How about then, rather than taxing corporations, you tax the benefactors of those corporations directly? When you tax Walmart, sure you tax the C-suite, but you also make it so that Walmart can hire less people, and invest less in the economy. Rather than taxing the corporation, what if you just taxed the C-suite directly? Tax the Walton family, or the highest earning employees directly, and you get to have your cake and it too since you get similar amounts of tax revenue without damaging the economy nearly as much.
You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states. This is supply side economics at work, and an example of how supply-side economics can be easily misrepresented.
How do you compare a criticism, with a policy? Trickle-down economics doesn't have any legislative appropriations. It's not taught in economics classes. Like saying "what's the difference between a boat and a car?" I can tell you that a boat is not a car, but I can't compare the wheels of a car with a boat, nor the keel of a boat with a car. They are different things is all I'm trying to say.
Now as for why I didn't expand with nuance earlier, in my defense I was expanding, but elsewhere in the thread. I foolishly thought this was enough.
> You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states.
This is only true if you look at the standard tax rate. The effective tax rate of a lot of US corporations is appreciably lower.
It works in places like Scandinavia because they don't give corporations ways to lower their tax burden
My point still stands though. Taxing income and consumption directly (hopefully the income/consumption of rich people) is preferable to indirect corporate taxes.
In other conversation though, am I curious to know where you got your data. As far as I'm aware the Scandinavian countries do in fact have a robust system of corporate tax incentives. This is part of the reason they boast such high productivity.
I very well might be wrong here though, and the topic is interesting. Would you care to share a source?
You can't call "trickle-down economics" a strawman without actually naming what is different between it and "supply-side economics". Otherwise I have to assume that people are just calling the same policy by two different names. Like how proponents of DRM call it "Digital Rights Management" and critics call it "Digital Restrictions Management" but both people are referring to the same technology.
tl;dr: If you could name me differences you would name me differences
My above comment helps with the distinction. If you missed it:
"""
I think supply-side economics deserves more nuance than simply thinking we need to make the tax rate arbitrarily low. The Laffer curve isn't the only thing you should look at, since where you tax can be just as important as how much you tax.
Take corporate taxes for example. If one were to advocate to get rid of corporate taxes, you might think that person unabashedly biased. What kind of person would want to give breaks to the richest people (corporations) when everyday people are the most in need of those kind of cuts, right?
But the reality is that when you tax corporations, that is one of the most economically damaging taxes you can do. How about then, rather than taxing corporations, you tax the benefactors of those corporations directly? When you tax Walmart, sure you tax the C-suite, but you also make it so that Walmart can hire less people, and invest less in the economy. Rather than taxing the corporation, what if you just taxed the C-suite directly? Tax the Walton family, or the highest earning employees directly, and you get to have your cake and it too since you get similar amounts of tax revenue without damaging the economy nearly as much.
You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states. This is supply side economics at work, and an example of how supply-side economics can be easily misrepresented.
You know enough about it to misidentify that obvious string replacement command as an example of it.
Your comments are incoherent and disingenuous. Saying that trickle down economics is "an entirely pejorative term created by detractors of supply-side economics" is very much saying that they refer to the same thing ... and it's the thing they refer to that TFA argues only helps the rich. You say that "the policies of supply-side economics, however, are much more defensible" but you offer no defense, and no rebuttal to TFA.
> For example, the Cartesian circle does not refer to any of the many mathematical advancements Rene Descartes discovered. Instead, it's the name of a common criticism for an argument he made.
This is the most inept attempt at an analogy that I can recall seeing.
I have a thing about people who act in bad faith, or argue so ineptly that it looks like it ... I won't be responding further.
> You know enough about it to misidentify that obvious string replacement command as an example of it.
I figured the syntax was like an either-or thing, but I wasn't sure.
> Saying that trickle down economics is 'an entirely pejorative term created by detractors of supply-side economics' is very much saying that they refer to the same thing...
I don't think it is. What I'm _not_ trying to say is that trickle-down economics is a nickname for supply-side economics. More, trickle-down economics is a strawman. Not the same thing or a different name, but an inaccurate version--a caricature which doesn't even resemble policy. Also I'm not sure what "TFA" stands for.
> This is the most inept attempt at an analogy that I can recall seeing.
It was kind of rough.
Regardless of the incompetence of my arguments though, I promise I am not being intentionally dense. I really do try to act in good faith here on HN, and I'd appreciate it if I could hear more of your perspective and continue this civilly.
You'd think so but not even a decade ago Kansas tried it again and it failed and the GOP continues to cut taxes for the wealthy and people keep electing them.
Most of the nation (and world) never took any economics. This stuff is all magic or religion or whatever to them. Ronnie Raygun is as good as a saint to much of the US.
Non-typical Kansas voter here. I reviewed candidates and any mention of “cut taxes” is a hard no from me. I have kids, and I want to make sure their schools are fully funded. The only tax cuts I would support would be on essentials like food and clothing.
I also don’t like targeted new taxes, like taxing sports gambling and recreational drugs, because it unnecessarily entrenches those in our society. Even worse is when they earmark it, like using casino money to fund schools.
Can you describe the defensible policies of supply-side economics? That's as vague a term as trickle-down economics to me.
Supply-side economics is based on a flawed premise of looking at only the Laffer curve and saying if taxes are too high the economy suffers, therefore we must make the tax rate arbitrarily low. In reality though there are more nuances to making the tax rate arbitrarily low (e.g. high inflation and cost of living for starters).
Sure. I think supply-side economics deserves more nuance than simply thinking we need to make the tax rate arbitrarily low. The Laffer curve isn't the only thing you should look at, since where you tax can be just as important as how much you tax.
Take corporate taxes for example. If one were to advocate to get rid of corporate taxes, you might think that person unabashedly biased. What kind of person would want to give breaks to the richest people (corporations) when everyday people are the most in need of those kind of cuts, right?
But the reality is that when you tax corporations, that is one of the most economically damaging taxes you can do. How about then, rather than taxing corporations, you tax the benefactors of those corporations directly? When you tax Walmart, sure you tax the C-suite, but you also make it so that Walmart can hire less people, and invest less in the economy. Rather than taxing the corporation, what if you just taxed the C-suite directly? Tax the Walton family, or the highest earning employees directly, and you get to have your cake and it too since you get similar amounts of tax revenue without damaging the economy nearly as much.
You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states. This is supply side economics at work, and an example of how supply-side economics can be easily misrepresented.
You can't do that, because the Walton family and others are really, really good at avoiding getting taxed. Even small business owners like my uncles do whatever they can to avoid any sort of taxes. I never paid VAT on sport equipments or DIY equipment, which are what they sold, but we also managed for my whole school life to avoid paying VAT on school supplies, and it's probably the same for my 22 cousins. Tax avoidance is a really good hobby for those people.
I mean that’s not what Laffer curve says, the only thing it says that the revenue from taxes grows until some tax rate, above which the yield starts decreasing.
This says nothing about the wider economy nor about what the tax rate should be, and on its own it doesn’t seem too controversial to me.
You're right, it's not one lie, it's a pack of lies, trotted out every time congress needs to justify another capital gains tax cut or rationalize why the next tax hike needs to target work not wealth.
I've been reading about the US progressive era of 100 years ago and I am seeing from Robber Barons many of the same arguments that I heard growing up from my Reagan-worshipping parents. It's both frustrating and encouraging to know that we soundly defeated these at one point before the pendulum swung back. They didn't invent a new pack of lies, they just put the old one in the microwave and gave it 30 seconds.
I suspect that were I to learn about the industrial revolution I would find that the US Robber Barons didn't invent their talking points either and that they simply took British Industrialist talking points and, err, gave them 3 minutes on the stove.
That's quite funny. I recall several people not even responding but just silently staring at the proponent. Other bad ideas (like privatization) were adopted by repeating opposing talking points.
OBBB Opportunity Zones? Bonus depreciation? If you are unfamiliar with these or their applications to tax avoidance, you are outing yourself as a wagie running defense for your economic betters.
As for tax hikes <90%, this hasn’t occurred in income; the opposite has occurred. You could make the case that it hasn’t been worth it for the poorest brackets though, given other coincident policy changes
The article focuses specifically on the economic effects of tax cuts, concluding that they have little overall positive effect on economic or job growth. This is consistent with meta-studies looking at the relevant research. To the extent that "supply-side economics" predicts that tax cuts will stimulate the economy, it's fair to say that it has indeed been debunked.
I always like to approach this conversation with a question:
Should business that actually do create jobs in practice get bigger tax breaks?
For example, if I by some miracle create a 1 man company that makes $100 million / year profit and somebody else creates a company that makes $100 million / year profit but has 2,000 employees...should the two companies be taxed differently?
Walmart employees 1.6 million people in the US. 68% are full time. Average salaries range from $18.25 / hr (field associate) to $27 / hr (supply chain). Median $30,520 across all US employees. 156,000 employees are estimated to be enrolled in Medicaid (9.4%).
Amazon employees 1.1 million. $23 / hour average for field / fulfillment. Median $53,211 across all US employees. 123,000 employees are estimated to be enrolled in Medicaid (11.7%).
Both offer pretty extensive career development, training and tuition assistance programs.
Profit per employee:
- Walmart $10,800 / employee (1.6 million employees)
- Amazon $50,000 / employee (1.1 million employees)
By comparison:
- AppLovin $3.7 million / employee (898 employees)
- NVIDIA $2.86 million / employee (42,000 employees)
So what if we actually had a tax strategy that literally was aimed at "job creators" rather than "capital gains"? What would that look like?
> All else being equal, you want to produce more with less labor and other inputs
Is that actually true? Maybe I'm being dense right now but that's not completely apparent to me.
More abundance per person does seem generally better (albeit there's eventually diminishing marginal utility), but that's not the same thing as society as a whole producing more with less labor.
Maybe "all else being equal" is the operative condition here, like assuming that the economy would be able to absorb newly freed labor into new economic activity?
You can also optimize some good things out of existence in this manner, and it's still not clear that robots are going to be able to swoop in and save that kind of newly uneconomical activity, at least within my lifetime.
> More abundance per person does seem generally better (albeit there's eventually diminishing marginal utility), but that's not the same thing as society as a whole producing more with less labor.
That's true to a certain degree, but there's a labor supply factor involved too. If companies are rewarded for employing more people it lowers the available supply of labor forcing companies to create a more enticing environment to attract that labor (prices, benefits, etc).
It compounds if the incentive is aimed at domestic labor.
> All else being equal, you want to produce more with less labor and other inputs.
So what incentive structure would you suggest? How do you prevent the concentration of wealth that results from a business raking in millions of dollars per employee?
But this is precisely how you get these large wealth gaps in society. Not like the 1% vs the bottom 50%, but the bottom 50% vs the top 30%.
That "high efficiency" is actually "less humans in the loop".
Compare something like money managing to car manufacturing. A team of money managers might clear $1B+ in revenue for a year with a team of 200. To clear $1B a yr selling cars, you need workers and supply chains that are tens of thousands of workers deep. It's the very inefficiency of manufacturing goods that makes it so attractive to workers.
This problem is inherent and intractable, but the natural order is to whither away the inefficient parts and only keep the most functional ones.
For those reading closely, this is also how you get a begrudged "coastal elite" and populist presidents like Trump (tariffs, anti-immigrants, state backed industry) elected. They want suffering for the offices of 200 people bringing in billions, and a return of the massive factories and supply chains with tens of thousands being the ones brining in billions.
> All else being equal, you want to produce more with less labor and other inputs.
And firms are already incentivised to increase productivity, including by offshoring jobs or replacing staff by robots, because that's their profit margin. And in this case we're not concerned with firms reducing costs in general, but firms substituting capital for labour. This was an improvement for agriculture, but it was an improvement because that labour found more productive things to do...
But if you're a government those decisions businesses make don't help unless the robots or Chinese factories are considerably more efficient at making stuff than domestic labour, because a business decision that at the margin spending a dollar less on domestic labour and 99 cents more on another production input is very slightly more efficient loses the government more in income tax receipts than it gains on anything else, and usually adds to their benefit bill. Also, people don't like their jobs being replaced.
(And yet ironically, tax structures are often more favourable to companies increasing the capital input and decreasing the labour input...)
Obviously it's true that you can go too far and end up subsidising firms to keep on employees that aren't doing anything useful, but relatively minor tax breaks which mainly advantage low margin retail businesses don't do that, and they're not going to stop NVIDIA being NVIDIA either. But they might make the $45k outsourcing contract not look a substantially better deal than retaining the $50k employee.
I would say a corporation's taxes should, at the very least, cover the tax burden generated from not paying their employees enough to make a living wage.
So if their employees are on government assistance, the cost to provide that assistance is inherently their burden. One way or another, every employee they employ will be earning a living wage from them.
I don't even care about overlap. If both Target and Walmart have to pay the difference between the full cost of government assistance for the same person, that's fine. Build a fucking library or something.
If Walmart employees somebody who's part time and is on Medicaid are they on Medicaid because of Walmart or because they couldn't commit to enough hours to go full time? 9% of 1.6 million employees on Medicaid means they are employing over 1.4 million people who are not on Medicaid, all of whom are taxed for income, payroll, property, sales, etc.
If Walmart decided tomorrow to terminate all employees who were collecting Medicaid so that they could avoid a tax increase for that stat would it be a good thing? Is it better for a company to avoid hiring at all, even part time, if they can't fully purge the employee from government assistance?
The number of Walmart workers on some form of government assistance is significant.
Significant enough that Walmart couldn't operate without them. Not to mention, Walmart manages to capture those government dollars through accepting EBT and such.
And the goal is to make WalMart pay regardless of how they try to weasel out. If you say "only full time", then they employ thrice as many people and give no one enough hours to make a living. Same if you prorate to hours worked.
Essentially you need to stop inventing rules and systems that can be gamed. Because Walmart is incentivized to game them. Push them in the direction of hiring people full time and paying them a fair wage for their time.
> The policies of supply-side economics, however, are much more defensible, but it seems people would much rather pick on the strawman.
Lowering taxes is one of the policies of supply-side economics:
> Supply-side economics is a macroeconomic theory postulating that economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade.[1][2]
The actual paper never uses the phrase trickle-down economics and just covers how tax cuts for the rich don't improve the economy but does increase income inequality
I mean, when I googled supply-side economics it said it was another name for trickle-down economics. I'm interested in how you'd say they differ, honestly, not trying to be argumentative.
It seems obvious that there is an optimal tax rate, too much or too little is bad. But I'd definitely say right now we are far far on the too little side of things.
I think there's also the consideration that the Laffer curve is very Ceteris Paribus.
In reality higher taxes implies higher spending, and different countries spend differently. It's entirely possible that the peak of the curve moves based on where you plan to spend the money. If you proposed a 5% tax increase to build the supports to take on Taiwan in semi, then you probably have a curve that looks different than a 5% tax increase to start a war.
Exactly: in political rhetoric, the Laffer Curve is 5% an honest examination of tax tradeoffs and 95% a trojan horse designed to smuggle into the conversation the assumption that we are on the "drowning in taxes" side of the Laffer Curve.
I don't know where you're looking, but if you go to the first result for trick-down economics, the Wikipedia page, within the first few lines it mentions how the term is used, and how it was created by detractors of supply-side economics. It's never been a real policy.
"the term 'trickle-down economics' was popularized by Democrats in the US to derogate Reaganomics"
If you similarly look up supply-side economics, at the top of the Wikipedia page it says
"not to be confused with trickle-down economics"
I'll happily take you on your word that you're not trying be argumentative. It's certainly not your fault that this strawman has been so widely spread that people think it's a real policy idea now. It is confusing to me too.
As for whether supply-side economics actually works, to say it "hasn't panned out" I think, is really oversimplifying. Has capitalism (efficient markets but also environmental decay) worked? Has socialism (universal healthcare but also the military) worked? It depends on who your asking and in what regard. In some ways yes and in other ways no. The category is too broad.
Also, just as important as how much we tax is where we tax. Carbon tax (very good) vs stamp duty tax (very bad). Competent policy often allows you to have your cake (supporting government services) and eat it too (not sacrificing growth).
What is the difference between how trickle-down economics is portrayed vs. the actual ideas of supply-side economics? You have to specify how / in what way it's a strawman
I have literally seen it being defended, in all seriousness, after the economy crash. When the financial institutions were bailed out.
Maybe not the name, but the literal idea that the money given to them will flow down. There were even graphics gping with it. Again, in all seriousness.
I think a large part of the issue, ignoring the self-interest one (certainly those of money will argue that their taxes should be less) is that both the supply and demand side can interfere with the proper functioning of the economy
My quick take is that during the 2008-ish great financial crisis, those in power were children of the 1970s supply-side shocks (demand>supply resulting in shortages and inflation), and used precisely the wrong tool to handle the demand-side shock of the GFC: interest rates were zero-to-negative, indicating a surplus of investable cash and no place to put it to work, and policymakers responded by...cutting everything on their side to the bone as well (austerity). At a high level: the economy was literally trying to pay the government to spend money on productive investment, but this once-in-a-lifetime opportunity was largely squandered
This is ridiculous. "Trickle-down economics" is just another name for "supply-side economics". You can also call it "voodoo economics", as George H.W. Bush did. They're all referring to the exact same failed policies that have been criticized for failing to achieve what they claim to achieve for 130 years.
Trickle down economics is just another name for supply-side economics. They're one and the same. The difference is that the name "supply side economics" focuses on the the beneficiaries while the name "trickle down economics" focuses on the results.
Supply side economics owners claimed that benefits would "flow" down from the capital owners. The pejorative name "trickle-down economics" accurately reflects that the quantity of benefits that "flows" down to everyone else from those benefiting from massive tax cuts is a mere trickle of the money that the supply side saved from the tax cuts.
The current issue I feel with taxing is that, at least in USA, it mostly taxes based on Salary on Employees, but never tax on the capital or the actual wealth.
Tax the rich means: Increase W2 tax and property tax which, takes money away from me to feed lower middle class
Tax cut means: Reduce the estate tax and cooperate tax, keep the W2 tax flat, and cut the benefits that most critical to the bottom: Food stamps while keep other unnecessary programs unchanged: Discounted Toll for low income when driving in HOV lanes.
The paper talks about economic growth, income distribution and unemployment.
I'm mostly interested in economic growth, so looked at what the paper claimed about that.
It found that major, sudden reductions in taxes on the rich did not have any statistically significant effect on the trajectory of economic growth over the following five years.
But:
- Their sample is small. They only looked at relatively large, discrete declines in their home-grown measure of taxes on the rich. They did not look at all tax-rate changes.
- They did not look at effects beyond the five-year horizon, which means it would probably exclude the impact on people starting startups, as the successful ones usually take more than 5 years to start making serious money. (or did during the period the paper considered, even if timelines have subsequently accelerated.)
- Big sudden tax cuts don't happen in a vacuum, and I don't see a way to control for confounding.
The question I have is that at some point X taxes are collected and the economy is growing at Y, then the policies change and now X-5 taxes are collected and the economy grows at Y. What was the function of the 5 under the first regime?
Slowing the growth of the country’s debt. Some would argue this gives flexibility to expand that debt during crises like wars, economic events, or pandemics; by “keeping powder dry” in terms of debt to GDP.
Are you thinking specifically of the US or you thinking of all the countries that were part of the data they reviewed? Also, how does leaving the wealth in the hands of citizens prevent it from being taxed in the future if needs be?
A lot of the poor and middle classes don't understand how a billionaire earning millions of pounds per week in passive income is any problem for them - or where it comes from
1, billion, 2 billion, 100 billion individuals makes no difference to the average person
In fact there's a misguided sense that they earnt that money through work and not rent seeking
But the sad truth of the matter is - the rich are on the other end of your mortgage or indirectly your rent - the other end of that business loan to your favourite coffee shop controls the price of your coffee - you pay them interest directly or indirectly through everything you pay for and they use that money to buy more of the assets you use - they are a massively increasing rent seeking class
Their wealth growth is exponential it compounds on itself some particularly rich people are seeing 40% annual returns and the overall economies wealth growth is 1 or 2%
It's analogous to a black hole things like capital gains tax and income tax mean nothing to these people because they don't sell and they don't have a "working" income because that's not how the ultra rich accumulate wealth
The sad thing is for people on benefits the government look automatically into your personal bank account and track anything coming in - they have built a massively invasive infrastructure to track the poor so they can remove their benefits if they try to earn £5 selling music or selling IT services - but if you're rich the government don't even know how wealthy you are - the government doesn't know how many billionaires there are - let alone any talk of having to tax them - so they get to pay very close to - if not nothing - whilst software engineers (as an example relative to this forum) in the UK get to be the high rate tax payers where 50% or more is taken
Everyone else has to fund their free ride and its absurd - they're the group that need the least support financially
This is basically what happened in Orbán's 16 years in Hungary. He gave indirect tax cuts for the rich, or just generally everyone who is not living pay check to pay check (by hungarian standards it means you are rich). So for example installing solar panels came with a tax writeoff but the whole thing was setup that it only benefit who already have had enough money to install a full brand new solar panel system. So it didn't help at all those who are really in need. Same happened with EV cars. If you already have money for a brand new EV car you got it cheaper. For the rest? Good luck. Mind you this is eastern Europe where everyone is driving +15 year old diesels from Germany. The rich got richer.
Same in Finland. The ruling party (represents the rich and the business owners) gave tax cuts for rich (high income earners and and those who have capital gains). Next they're planning to cut the business tax 4.5 percentage point. Eroding tbe states tax income while the state is already in the hole with a ton of debt. Of course the story is that these will kick off investments and make business boom. Best part is that to compensate for the tax cuts they're gutting the benefits including social security, unemployment benefits (highest unemployment in Europe btw) and calling those people lazy who just need "encouragement" to start working. A real hero pasty.
Similarly incentives to buy EVs naturally only apply to the folks who are better off. Most working class buy cars that are +10 years old. (The average car age is among the oldest in Europe btw)
Ehh, I don't know if those examples really apply, even if they effectively have a similar outcome. Incentives for environmentally friendly tech are more about helping those industries get off the ground against entrenched incumbents that are harmful to everyone. The benefit of less exhaust in the air is immediately good for everyone.
Although I'm sure government and corporate greed was able to exploit those policies as much as it could.
Subsidies for electric car and solar panels on private house are a very specific loyalty rewards. No random person receives it, the requirements and bureaucracy are impenetrable.
The same in Poland. Poland, Slovakia, and Hungary are oligarchic corrupted disfunctional hellholes. No, electing this new politician and party will not change anything. Without "license to steal and defraud" your life there will be miserable. Hopefully Russia will not take the easy opportunity and attack, but hey at least they'd erase the local "elites".
"We'd been floating on inner tubes on the river for 8 hours, drinking beer, and I realized that not once had any of my friends gotten out of the river to pee."
---ron white, upon experiencing a flash of enlightenment. quote from memory.
In Germany it's 90k EUR, in Poland it's a mere 30k EUR gross on employment contract. No it's not a coincidence, the government knows what they're doing. In short, they are not friends with those on employment contract in private sector.
In UK though the salaries are fixed at 25k GBP annually until forever, they simply like this number.
All the brain dead marxists here - please remember, any artificially promoted slogans whether it’s “tax the rich” or “cut the taxes” are there only to get your votes. The real problem is never as simple as turning few knobs.
No shit. If you want a tax cut to have an economic impact, cut taxes for the poorest, the ones with the least disposable income.
EDIT: Seems like the article is suggesting that giving more disposable income to the rich, results in them using that extra income to buy capital rent seeking assets. So it is a double fuck you to the poor. Because not only do the rich end up paying proportionally less in taxes, but they also use the extra money to compete with you for your home, buy the home and rent it back to you, putting you in an even worse financial situation.
Take the inverse stance: take a country that taxes its citizens to death, like France or Belgium. How are they doing? Very badly.
France is concerned that the IMF main jump in and take things under control because the government's public deficit is out of control. With a GDP of about $3.6 trillion (american trillion, not french) and public spending representing, officially, 57.2% of those $3.6 trillion, that's a cool $2 trillion spent, yearly, by the state. This is where wealth goes to die.
If you were to seize, just fully seize (and consider it's liquid, which it is not), the wealth of all the billionaires in France (there aren't even 50 of them) you'd end up with $500 billion.
So if you were to just take all the wealth from all the french billionaires, you'd only pay a quarter (!) of the budget of the french state. For one year.
And that's it. 25% for a year.
Another way to see it: the french public deficit is more than $100 billion, yearly. If you were to seize the wealth of all french billionaires, you'd only have enough money to prevent the public debt from growing (which has to be at around 140% by now) for five years.
I'm not listening to talks about "taxing the rich" anymore until that caste called politicians stops spending money it doesn't have, enslaving future generations that shall be taxed to death to pay the insane public debt their governments are creating.
Wanna talk about what's happening to the city of Brussels (Belgium), my native city? 40% right at the poverty line. Immense deficit. Conditions of living going down the drain. First political party in the poll is now the PTB, a full on communist party (and communist in the EU have noticed that, at the moment, they could get the votes of islamists, so strangely enough in a "the enemy of my enemy of my friend" way, communists in countries like France and Belgium happen to be very welcoming to religious extremism [in France the communist party literally has been forced, when it created a coalition with others party at the left, to sign a paper saying it condemned islamism terrorism for they've been so cosy with the idea that it really wasn't clear at all that they actually were against islamist terrorism]).
And you want to get me started on that wonderful discovery the left made recently: that by importing millions of poor migrants and then giving them the right to vote, by a very surprising coincidence these poor imported migrants happened to not vote for the right?
How... Convenient?
Several countries are discovering that: "you eventually end up of the money of others" and "when the rich becomes poor, the poor dies".
The one thing that really irks me in this is the full-on hypocrites I know who believe that anyone richer than them should be taxed to death: to them "trickle down economics" do not work but that they live a middle-class lifestyle more preposterous than 99% of the planet doesn't bother them. They want lower taxes but not for those richer than they are.
I cannot understand that mindset.
I hate the Zuck: really, screw that guy and his faked 3D legless avatar demo for his dystopian VR world (how did that one turn out btw? As well as the Meta AI race?) and screw his PHP+JavaScript "punch the monkey" abusive ad world. Just fuck it. But I don't give a single crap in the world that he's got two $250 million Yacht or whatever they cost and however many he's got.
Good. For. Him.
I'd rather be poor and free than live under communism. And doubly so if we're talking about living in a society dictated both by religious intolerance and communism (which is where several countries are headed).
And if you want to "help the poor", go give all your money, open your house/appartment to pooor migrants and give me a fucking break.
You should include other countries for reference. The US has approximately 390x that amount of debt (only 5 times the population) and the average person is economically much worse off than all the European countries you just mentioned.
We literally spend more government money per person on healthcare than France does while having less public healthcare, precisely because of the "help the rich" policies causing most of that public money to go to subsidizing insurance companies.
> the average person is economically much worse off than all the European countries you just mentioned.
Where on earth did you get this idea? US Households have much higher disposable income (~50% higher than the Western European average) and much lower household debt levels than the average Western European country. See OECD links below.
> We literally spend more government money per person on healthcare than France does while having less public healthcare, precisely because of the "help the rich" policies causing most of that public money to go to subsidizing insurance companies.
Is this shocking display of government incompetence supposed to be an argument for increased spending, more government involvement, or both?
Well said. People won’t like to hear it but it’s true. If you seized the wealth of every billionaire in the US you could fund the federal government for about a year. Of course most of it is not liquid so in reality much less. So when people talk about how we need to “tax the rich” and our problems will be solved I assume they're lacking in political knowledge. Or they just see it as a form of punishment for daring to accumulate so much wealth.
This makes the false assumption that all the money given to the poor go back into high margin goods that the rich profit from? it ignores competition, ignores productivity gains by a lesser impoverished population, ignores the impact on small businesses...
there are all sorts of losses inherent to poverty that shouldn't be discounted, like the inability to save via bulk purchasing, transportation, high cost credit, preventative spending, time losses...
in theory eliminating the poor by literally giving them money could have an impact that makes society better for everyone... it's very reductive to assume there's just one big knob that the rich can turn to get it all back
The rich own things. They collude. You hit them with costs and they put the price up which is validated by the extra money given to the poor, or by wage suppression as there aren’t enough jobs to go around.
Taxes on the rich are like increased power bills. Businesses pass on costs at a markup.
They can do that because you need a job to eat and they only need to hire if there is a profit to be had.
It's called inflation. If you helicopter money on people they will bid up the prices of everything that they need. We had an experiment with this just a few years ago.
except that the biggest handouts during covid went to businesses, not people... so we didn't really, it was also a very supply constrained economy which was unique to the situation
at the very least locking up a trillion dollars with some douchebag isn't a reasonable strategy against inflation
And by making it so that an employee can safely quit at any time without losing their ability to, you know, not get blasted by insane surprise bills - e.g. healthcare.
Doubtful. The UK is practically at this point with generous benefits and a very progressive tax curve (you don't pay any tax on the first £12.5k of earnings).
It seems like all it does is lock people into poverty with unreasonably high effective marginal tax rates.
Can we please tax the negative effect that big money has on the rest of us?
I mean I'm perfectly fine with people who work hard making a lot of money. But that changes once that money is used against me. From that moment on I want to be compensated for damages, and the best way to do it is through taxes.
I want a system that taxes things we don't want (unproductive rent-seeking) and doesn't tax things we do want (productive stuff e.g. income tax).
I don't want to be personally compensated. I just want to live in a society where people's basic needs are easily met: clothes, food, medicine, housing. The current landscape is, by the day, increasingly dystopian.
The scientists who worked for the cigarette companies couldn't find a link to cancer. Economists who work in academia can't find working economic policies for the same reason. Private sector economists on the other hand...actually place bets and get rewarded or punished for being wrong. Not shockingly, they have very different opinions from the academic economists.
PS And you wonder why Mississippi is richer than the UK.
PPS The Laffer curve is real, has a mountain of evidence and disproves this paper.
I thought the scientist who worked for cigarettes companies did find a bunch of links but the companies squashed the results. It’s pretty famously known that they knew cigarettes were bad for you decades ago.
If we're really doing these comparisons, the think tanks that wrote policy pieces for the cigarette companies talking about the evils of regulating tobacco were also particularly passionate about tax cuts for the wealthy benefiting everyone...
every single time taxes for the wealthy were cut, it was argued that the laffler curve would make up for the loss in federal tax receipts, thus leaving us with the same level of services and a larger economy.
every single time its resulted in lower tax intake compensated with more deficit spending.
Everytime we increase taxes past the optimum point of the Laffer curve, the government takes in less total tax. If you aren't past the optimum point, it won't. And your claims about loss of collected taxes haven't really ever come true at the US federal level. Total tax receipts in the 1980s were very high and there were several major tax cuts then. The same pattern usually follows, but the effect of the Laffer curve was deformed during the 1990s due to the dot com boom. Tax cuts in the 2000s increased tax receipts. The Trump cuts in the late 2010s did the same.
The last 6 CA tax increases all resulted in less taxes being collected the following year. Now there are multiple things that can impact total tax collected for CA (mostly the S&P500), but those factors all varied in those 6 tax increases. As for federal tax, if a tax cut doesn't result in an increase in taxes collected, then you are likely below the optimum point in the curve.
PS The government doesn't have a tax collection problem, it has a spending problem. On average, every public sector job costs 3 jobs in the private sector. If the size of a government is choking the economy, then messing about with the tax rate won't fix the problem.
> And you wonder why Mississippi is richer than the UK
Because Mississippi didn't have Brexit /s
All jokes apart I don't see any real evidence that Mississippi is richer than the UK. Their median household disposable income is pretty damn close ($49k vs $54k). The UK has a better social and health safety net (where would you rather be unemployed or disabled?).
Mississippi has much lower life expectancy than the UK (69 vs 79 for men). Crudely speaking a Briton makes $5k less/year but lives 10 years longer - a trade almost anyone would make in a heartbeat.
I won't bother digging into other quality of life indicators vs economic indicators but I expect Mississippi will be mostly equal or worse.
On average Mississippi may have higher dollar numbers on a spreadsheet. That doesn't mean squat for the ordinary person on the street. If anything this is an argument against trickle-down economics/the Laffer curve.
Mississippi has far better food and better weather so I don't think life is better in the UK. Also, I have no idea where you got the life expectancy number from, but its not current. I suspect its just a bit old. Its currently like 74 and mostly that's the effect of the Oxy epidemic which is going away with time.
I have been to the UK and I have been to Mississippi. Quality of life in Mississippi is far higher unless you really really like musicals (London is big for those). Mississippi has a better history of music and writing over the last 100-150 years. The food is cheaper and far more tasty. The weather is warm and winters are mild. They generally don't get natural disasters unless you live right by the coast and even then its once in 70 years. The health care is far higher quality. The people are warm and friendly. And the cost of living is lower.
The British are known for being miserable for a reason.
fwiw, we get bad hurricanes more than that and also the mid-south is the new tornado alley. there was a very bad ice storm this past winter. natural disasters happen everywhere. and it's hot AF in july and august, like so hot that you stay inside all day.
Oh, and post-war British music wouldn't exist without Mississippi. Pink Floyd is literally named after 2 musicians from Mississippi. The Beatles musical style started out by copying music from Mississippi. And the list goes on from there. Just saying, large chunks of British culture are copied from Mississippi and the surrounding areas.
The thing I don't like about this is that it treats trickle-down economics as if it's something that needs to be debunked. Trickle-down economics has never been a real economic policy, and never been seriously advocated by federal policy-makers. It is an entirely pejorative term created by detractors of supply-side economics.
The policies of supply-side economics, however, are much more defensible, but it seems people would much rather pick on the strawman.
> as if it's something that needs to be debunked.
When half the country has believed something for close to a half a century, across multiple generations, you bet your ass it needs to be debunked. The fallacy of the "precious job creators" is as American as "pulling yourself up by your bootstraps"
The fact that you and I were not dumb enough to fall for it doesn't really help anyone in the grand scheme of things. There's still an insane amount of work left in educating the public, and we may even be regressing at this point.
> When half the country has believed something for close to a half a century, across multiple generations, you bet your ass it needs to be debunked.
It dates back to the late 1890s (and has been criticized since then):
> In 1896, United States Democratic presidential candidate William Jennings Bryan claimed in his Cross of Gold speech that his opposition based their policies on the idea that the success of the rich would "leak through" to the lower classes, stating: "There are those who believe that, if you will only legislate to make the well-to-do prosperous, their prosperity will leak through on those below."[8][9][10]
> In 1932, humorist and social commentator Will Rogers wrote a column criticizing Herbert Hoover's policies and approach to The Great Depression and stated: "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot."[11] In 2007, political commentator William J. Bennett credited Rogers for coining the term "trickle down" and observed its persistent use throughout the decades since.[12]
* https://en.wikipedia.org/wiki/Trickle-down_economics
so I'm not hopeful it will ever go away.
I had no idea the idea was so old!
No one believes in trickle-down economics. As GP said, it's a pejorative straw man invented by its opponents.
So you're saying that when the Fox News talking head drags out the Laffer Curve to smuggle into the conversation the assumption that the next round of tax cuts for billionaires will unleash enormous economic growth that net-benefits everyone, he doesn't believe what he's saying?
You know what, you might just be right.
Maybe they don't believe in "trickle-down economics", they same way the do believe that "CRT and DEI are bad". They certainly believe that lowering tax rates raises revenue collected, that's an article of faith. I've see ex-Congressman Joe Walsh advocate for that viewpoint within the last year.
So why all the tax cuts? Sure the GOP are evil bastards who don't believe in it but apparently their voters do.
> No one believes in trickle-down economics. As GP said, it's a pejorative straw man invented by its opponents.
Except the folks that implement it:
> The cuts were based on model legislation published by the conservative American Legislative Exchange Council (ALEC),[8][9][10][11] supported by supply-side economist Arthur Laffer,[12] anti-tax leader Grover Norquist,[13] and the influential industrialists Charles and David Koch.[14][15]
* https://en.wikipedia.org/wiki/Kansas_experiment
The term was invented by its opponents, but it was a label that was put on actual policies, like Hoover's:
> In 1932, humorist and social commentator Will Rogers wrote a column criticizing Herbert Hoover's policies and approach to The Great Depression and stated: "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickles down. Put it uphill and let it go and it will reach the driest little spot."[11] In 2007, political commentator William J. Bennett credited Rogers for coining the term "trickle down" and observed its persistent use throughout the decades since.[12]
And Reagan's:
> Ronald Reagan launched his 1980 campaign for the presidency on a platform advocating for supply-side economics. During the 1980 Republican Party presidential primaries, George H. W. Bush had derided Reagan's economic approach as "voodoo economics".[16] Following Reagan's election, the "trickle-down" reached wide circulation with the publication of "The Education of David Stockman", a December 1981 interview of Reagan's incoming Office of Management and Budget director David Stockman, in the magazine Atlantic Monthly. In the interview, Stockman expressed doubts about supply side economics, telling journalist William Greider that the Kemp–Roth Tax Cut was a way to rebrand a tax cut for the top income bracket to make it easier to pass into law.[17] Stockman said that "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."[17][18][19] Reagan administration officials including Michael Deaver wanted Stockman to be fired in response to his comments, but he was ultimately kept on in exchange for a private apology.[20]
* https://en.wikipedia.org/wiki/Trickle-down_economics
It is pejorative, but it is not attacking a straw man, but actual policies that right-wing folks want implemented (and have).
"As GP said"
What they said is grossly dishonest, disingenuous, and incoherent. "pejorative straw man" is nonsensical. "trickle down economics" is, by your own accounting, a pejorative term for "supply side economics", but they refer to the exact same thing, and it's the thing that TFA argues only helps the rich. And since people do "believe in" supply side economics, they believe in trickle down economics since that is the exact same thing but given a name that is pejorative (and rightly so).
Neither of you has or can offer any defense of the policies that go by either name, or a rebuttal of TFA.
I have a thing about bad faith or such inept argumentation that it appears to be, so I won't respond further.
Can I extend an olive branch anyways? I really believe in good faith, civil conversation, and I'd love the opportunity to make amends here.
You've said you won't respond further, but seeing your passion, I think it would be great if we could have a civil conversation. I genuinely believe that trickle-down and supply-side economics are meaningfully different things, and I think there would be much to gain from hearing your perspective in more detail.
My thesis boils down to the fact that supply-side economics (say for example, something like small business tax credits) often gets conflated with trickle-down economics undeservedly. Trickle-down policy--take money from the poor and give it to the rich indiscriminately--is an objectively horrible idea, but I would say also that nobody is seriously arguing for that sort of thing.
(Also, I'm have no idea what "GP" stands for.)
There are supply side policy arguments that make sense.
But that's separate from the linked article, which was a discussion of an empirical paper that claims to find evidence that "tax cuts for the wealthy only benefit the rich"
A good faith way of addressing the argument would have been to look at examples where evidence appears to contradict this, or potential flaws in the academic paper, rather than dismiss the idea that supply siders believe that tax cuts for the wealthy benefit more than just the rich based on a label used in a blog headline...
(GP, in this context, refers to the "grandparent" comment upthread)
My problem is not the article saying that tax cuts for the wealthy are bad. Although this moves us into normative territory, I'd actually personally agree that tax cuts for the wealthy are not we need.
But my problem is that "take from the poor and indiscriminately give to the rich" is a mischaracterization of supply-side economics.
If "take from the poor and give to the rich" means just don't tax the rich so much, that's a mischaracterization of taking and giving.
It mischaracterizes the mask but accurately describes the face beneath it.
I'll pick up the conversation if GP won't (GP = grand parent, your post is the parent of mine and the post above is the grandparent of mine).
You're missing the forest for the trees. I argue that the forest is a high level strategy that has been playing out for approaching 50 years:
1. Push money into the capital economy and cut taxes. If anyone complains, cite growth.
2. Push taxes into the labor economy and cut benefits. If anyone complains, cite fiscal responsibility.
This doesn't necessarily show up to an egregious degree in any individual policy. I can think of a few examples but that's beside the point. If (1) and (2) are aggressively promoted and happen frequently while the invisible (3) and (4) -- capital pays taxes, labor gets benefits -- aren't and don't, then the net effect is intentionally and predictably and observably upwards re-distributive.
Furthermore, I don't buy the excuse that policy wonks don't understand this. Back in comparative government class, they taught us that Iran was a theocracy rather than a democracy not because it didn't do the rituals of electing leaders, but because a Council of Religious Experts got to select the candidates. You can have any color you want, as long as it is black (or Shia Muslim). In any case, the filter is the policy.
Between campaign finance and private ownership of media, it's no real surprise that in the US we have the policy filtering mechanism that allows (1),(2) and blocks (3),(4). Again, the filter is the policy, the same logic that makes Iran a theocracy shoves the US towards plutocracy, and we need to push back by shifting aggregate legislative attention away from (1), (2) and towards (3), (4) rather than getting bogged down in debates over whether any particular fig-leaf appropriately covers any particular penis.
From what I'm hearing, the argument you're making is that regardless of explicit policy goals, (1) and (2) implicitly further an agenda which has a similar end result to trickle-down economics, that being the "predictably and observably upwards re-distributive."
Now (1) and (2) as you mentioned, are broadly associated with the economic right in America. The usual narrative is that Republicans want to do (1) and (2) to concentrate more wealth among the rich, their reason for doing this being the trickle-down economics creed. There's two main problems with this narrative I see.
The first, is that (1) and (2) aren't strictly right or left. They can be bipartisan. The left--broadly associated with increased taxes on the rich, labor rights, and a bigger welfare state--despite its reputation, often engages with parts of (1) and (2). This is because (1) and (2) aren't strictly set. You can have parts of (1), or parts of (2), or mix-and-match, but presenting them as definitively joined is unfair.
Take the Inflation Reduction act from the Biden era, passed during a blue Congress. It invested heavily in renewable technologies--typically a left-wing endeavor--but wouldn't things like EV tax credits technically be considered corporate freebies, i.e. a bit of (1)? Or Trump's Working Families Tax Cut (the BBB), which although cut taxes for the rich, did genuinely expand the child tax credit and double the standard deduction--the opposite of (2). The point being that there's nuance in how you execute these policies.
The second problem I see with this narrative, is that policy goals are not the same thing as policy results. If legislation endeavors to solve a problem, but fails, it would be unfair to say that the legislation's purpose was to fail. While one could make the claim that (1) and (2) promote an upward redistributive, I don't think you can make the case that either the left or the right specifically aim for that.
This comes back to my central problem in this thread: trickle-down economics isn't a real policy. If you take purported aim of this caricature policy--taking money from the poor and indiscriminately giving it to the rich--nobody is seriously advocating for that. While you might think that that is what's broadly happening within the economy today, it's unfair to blame amalgamations of (1) and (2) policy and say that advocates of supply-side economics _want_ further inequality.
“GP” in this context is short for “grandparent” or “grandparent post”. It means the comment that they comment they are replying to, is a reply to.
Not the OP. But posting from a low-use, 10 month old alt handle (?) doesn't really gesture good faith.
I agree. If my sentimental promises are not enough, I don't blame you haha.
But I hope my pleading is evidence enough anyways. However much this means: I really am being sincere.
> Trickle-down economics has never been a real economic policy, and never been seriously advocated by federal policy-makers. It is an entirely pejorative term created by detractors of supply-side economics.
https://thehill.com/homenews/house/3522907-gop-lawmaker-byro...
Well here is one of those federal policy-makers you say doesn't exist, a Republican congressman, advocating four years ago for trickle down economics and advocating for "...letting the free market - and yes, trickle down economics, which does work - actually flourish in the United States"
If only big players had KPIs like us little folks!
r>g is close to a complete debunk of the trickle-down narrative, today and through history, and it's a remarkably sturdy result.
That's not serious advocacy as trickle-down economics isn't a policy that can be implemented. The policy associated with trickle-down economics is known as supply-side economics. Trickle-down economics is something created for a comedy bit to express, in a humorous way, why supply-side economics doesn't work. Even if you don't buy into the underlying message of the comedy routine and believe that supply-side economics does work, you still cannot implement that comedy routine as government policy. That... doesn't make any sense. Clearly that guy you refer to was performing his own comedy routine.
"Supply-side economics" is a technocratic rebranding of trickle-down economics, adding just enough nuance to force the draw rhetorically while advocating policy that is completely indefensible to anyone who has enough time to properly examine the nuance.
Again, "trickle-down economics" was created by Will Rogers. He was never a policy maker, just a comedian trying to tell funny stories. Nor did he accidentally create a policy in a 10 minutes of rambling standup routine. If you listen to the routine you will realize that he was talking about things that had already happened. He wasn't some kind of hidden political visionary.
We can accept that "supply-side economics" is a policy rebranding, but it is not a rebranding of "trickle-down economics". That is abundantly clear. There has never been a policy known as "trickle-down economics".
> We can accept that "supply-side economics" is a policy rebranding, but it is not a rebranding of "trickle-down economics".
Reagan's people would disagree:
> Ronald Reagan launched his 1980 campaign for the presidency on a platform advocating for supply-side economics. During the 1980 Republican Party presidential primaries, George H. W. Bush had derided Reagan's economic approach as "voodoo economics".[16] Following Reagan's election, the "trickle-down" reached wide circulation with the publication of "The Education of David Stockman", a December 1981 interview of Reagan's incoming Office of Management and Budget director David Stockman, in the magazine Atlantic Monthly. In the interview, Stockman expressed doubts about supply side economics, telling journalist William Greider that the Kemp–Roth Tax Cut was a way to rebrand a tax cut for the top income bracket to make it easier to pass into law.[17] Stockman said that "It's kind of hard to sell 'trickle down,' so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory."[17][18][19] Reagan administration officials including Michael Deaver wanted Stockman to be fired in response to his comments, but he was ultimately kept on in exchange for a private apology.[20]
* https://en.wikipedia.org/wiki/Trickle-down_economics
No, no such thing, only a hundred spectacularly regressive tax, trade, and benefit decisions sold on promises of growth that would supposedly benefit everyone and then didn't. Totally different!
Since you clearly haven't finished listening to the full joke yet, I'll reveal the punchline: What you describe is what Rogers called "trickle up".
"Trickle-up economics" has never been formally used to refer to a policy either, but at least if you called it that we would understand what you are trying to say. "Trickle-down economics" doesn't even make sense beyond a device used to setup a joke. It is bizarre that you keep going there.
"Grow the pie" is the phrase used by proponents, because they understand that "trickle down" invites uncomfortable discussions about "are you sure this will actually help me" while the pie analogy cleverly makes this question difficult to talk about. But it's the same argument and everyone can see it.
Proponents of what? Growing the pie isn't going to convince anyone who has a small slice of anything. Maybe you've never seen a pie before, but no matter how much it grows by the angle of your slice remains the same. People don't care about how much absolute wealth they have. If they did they'd all be happy as even the peasants today are richer than the kings of yore. In reality, people are only concerned about having a smaller share of the total wealth than someone else. Those kings of yore, despite having less wealth, are still considered to have been better off as they held the large share of the pie.
Ah, the "let them eat iPhones" argument.
No, cool tech does not make up for the ruinous cost of health care, housing, and education vs median wages. Maslow's Hierarchy still exists. A system that fails to deliver food and shelter for a reasonable number of worked hours at a reasonable and available job is still a failure no matter how cool the Big Screen TVs are.
So do %s/trickle-down/supply-side/g , then, if it's the term that's bothering you. Doesn't "debunking" trickle-down economics then, by extension, debunk supply-side economics? I'm not clear on the meaningful difference
I don't know regex, but to be clear: trickle-down economics and supply-side economics are very different things. I don't blame you for conflating them since they are intentionally very confusing.
One is a policy and the other is basically the name of a common criticism for that policy.
For example, the Cartesian circle does not refer to any of the many mathematical advancements Rene Descartes discovered. Instead, it's the name of a common criticism for an argument he made. You can think of it like that.
You just said trick-down wasn't a real thing so how can you say it's different from supply-side?
By "not real" I mean it's not a real policy. They are different in that one is a policy and the other is not.
how about this - Trickle Down is the implementation of Supply Side theory
Yeah I think that's also very inaccurate. Supply-side theory is not about indiscriminately taking money from the poor and giving it to the rich.
What's the actual difference, because you haven't actually supplied one. You've just said "They're different. One is a thing, and one is a criticism of a thing".
So, does the criticism not hold value? Because a large part of "supply-side economics", a term coined in the 70s, is reduction of taxes and regulations. With the idea that that extra capital will then be used to create jobs.
And if that is not what's happening, then I don't care about the semantics of whether or not "trickle-down" is the appropriate term of art to be applied here. The core concept of "giving rich people more money spurs job growth" is apparently false.
It has worked though. This policy created millions of jobs in China, Cambodja and Mexico.
The mistake that Republicans made is thinking that the nobles are loyal to the kingdom instead of their own personal greed.
Tilting the scale towards capital is a good idea when capital is the limiting factor on economic growth. A dollar invested rather than consumed brings two dollars in a few years time. Here's the thing: this is only really true in developing economies because, well, they develop. Inevitably, the amount of available capital outgrows the available investment opportunities. Expected rates of return and interest rates fall. At this point, subsidizing capital is every bit as foolish as subsidizing demand in any other ~fixed supply market. However, the enormous incentive to pretend otherwise remains.
Foolish: policies that favor capital are good
Smart: let's check interest rates to see if policies that favor capital are good
I mean, one is a name of a policy used by supporters, and the other is another name of the same policy used by critics? Name an actual difference?
One is a policy. The other is not a policy.
I can name you differences, but it's like comparing apples and oranges.
You are basically saying you can tell us, but you won't.
If you are not going to tell us anything, why are you teasing us as if you will?
Holding back discussion points is not a way to advance a discussion
You are right. I should be more forthright; I was answering elsewhere. Here's another comment I made that's relevant.
"""
I think supply-side economics deserves more nuance than simply thinking we need to make the tax rate arbitrarily low. The Laffer curve isn't the only thing you should look at, since where you tax can be just as important as how much you tax.
Take corporate taxes for example. If one were to advocate to get rid of corporate taxes, you might think that person unabashedly biased. What kind of person would want to give tax breaks to the richest people (corporations) when everyday people are the most in need of those kind of cuts, right?
But the reality is that when you tax corporations, that is one of the most economically damaging taxes you can do. How about then, rather than taxing corporations, you tax the benefactors of those corporations directly? When you tax Walmart, sure you tax the C-suite, but you also make it so that Walmart can hire less people, and invest less in the economy. Rather than taxing the corporation, what if you just taxed the C-suite directly? Tax the Walton family, or the highest earning employees directly, and you get to have your cake and it too since you get similar amounts of tax revenue without damaging the economy nearly as much.
You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states. This is supply side economics at work, and an example of how supply-side economics can be easily misrepresented.
"""
Next time start with this level of nuance. Flippantly arguing semantics about controversial issues is not the way.
It really isn't semantics.
How do you compare a criticism, with a policy? Trickle-down economics doesn't have any legislative appropriations. It's not taught in economics classes. Like saying "what's the difference between a boat and a car?" I can tell you that a boat is not a car, but I can't compare the wheels of a car with a boat, nor the keel of a boat with a car. They are different things is all I'm trying to say.
Now as for why I didn't expand with nuance earlier, in my defense I was expanding, but elsewhere in the thread. I foolishly thought this was enough.
I see, interesting.
> You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states.
This is only true if you look at the standard tax rate. The effective tax rate of a lot of US corporations is appreciably lower.
It works in places like Scandinavia because they don't give corporations ways to lower their tax burden
My point still stands though. Taxing income and consumption directly (hopefully the income/consumption of rich people) is preferable to indirect corporate taxes.
In other conversation though, am I curious to know where you got your data. As far as I'm aware the Scandinavian countries do in fact have a robust system of corporate tax incentives. This is part of the reason they boast such high productivity.
I very well might be wrong here though, and the topic is interesting. Would you care to share a source?
You can't call "trickle-down economics" a strawman without actually naming what is different between it and "supply-side economics". Otherwise I have to assume that people are just calling the same policy by two different names. Like how proponents of DRM call it "Digital Rights Management" and critics call it "Digital Restrictions Management" but both people are referring to the same technology.
tl;dr: If you could name me differences you would name me differences
My above comment helps with the distinction. If you missed it:
"""
I think supply-side economics deserves more nuance than simply thinking we need to make the tax rate arbitrarily low. The Laffer curve isn't the only thing you should look at, since where you tax can be just as important as how much you tax.
Take corporate taxes for example. If one were to advocate to get rid of corporate taxes, you might think that person unabashedly biased. What kind of person would want to give breaks to the richest people (corporations) when everyday people are the most in need of those kind of cuts, right?
But the reality is that when you tax corporations, that is one of the most economically damaging taxes you can do. How about then, rather than taxing corporations, you tax the benefactors of those corporations directly? When you tax Walmart, sure you tax the C-suite, but you also make it so that Walmart can hire less people, and invest less in the economy. Rather than taxing the corporation, what if you just taxed the C-suite directly? Tax the Walton family, or the highest earning employees directly, and you get to have your cake and it too since you get similar amounts of tax revenue without damaging the economy nearly as much.
You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states. This is supply side economics at work, and an example of how supply-side economics can be easily misrepresented.
"""
Name one that is not "one's a policy and the other is not".
> I don't know regex
You know enough about it to misidentify that obvious string replacement command as an example of it.
Your comments are incoherent and disingenuous. Saying that trickle down economics is "an entirely pejorative term created by detractors of supply-side economics" is very much saying that they refer to the same thing ... and it's the thing they refer to that TFA argues only helps the rich. You say that "the policies of supply-side economics, however, are much more defensible" but you offer no defense, and no rebuttal to TFA.
> For example, the Cartesian circle does not refer to any of the many mathematical advancements Rene Descartes discovered. Instead, it's the name of a common criticism for an argument he made.
This is the most inept attempt at an analogy that I can recall seeing.
I have a thing about people who act in bad faith, or argue so ineptly that it looks like it ... I won't be responding further.
> You know enough about it to misidentify that obvious string replacement command as an example of it.
I figured the syntax was like an either-or thing, but I wasn't sure.
> Saying that trickle down economics is 'an entirely pejorative term created by detractors of supply-side economics' is very much saying that they refer to the same thing...
I don't think it is. What I'm _not_ trying to say is that trickle-down economics is a nickname for supply-side economics. More, trickle-down economics is a strawman. Not the same thing or a different name, but an inaccurate version--a caricature which doesn't even resemble policy. Also I'm not sure what "TFA" stands for.
> This is the most inept attempt at an analogy that I can recall seeing.
It was kind of rough.
Regardless of the incompetence of my arguments though, I promise I am not being intentionally dense. I really do try to act in good faith here on HN, and I'd appreciate it if I could hear more of your perspective and continue this civilly.
You'd think so but not even a decade ago Kansas tried it again and it failed and the GOP continues to cut taxes for the wealthy and people keep electing them.
Most of the nation (and world) never took any economics. This stuff is all magic or religion or whatever to them. Ronnie Raygun is as good as a saint to much of the US.
Non-typical Kansas voter here. I reviewed candidates and any mention of “cut taxes” is a hard no from me. I have kids, and I want to make sure their schools are fully funded. The only tax cuts I would support would be on essentials like food and clothing.
I also don’t like targeted new taxes, like taxing sports gambling and recreational drugs, because it unnecessarily entrenches those in our society. Even worse is when they earmark it, like using casino money to fund schools.
Can you describe the defensible policies of supply-side economics? That's as vague a term as trickle-down economics to me.
Supply-side economics is based on a flawed premise of looking at only the Laffer curve and saying if taxes are too high the economy suffers, therefore we must make the tax rate arbitrarily low. In reality though there are more nuances to making the tax rate arbitrarily low (e.g. high inflation and cost of living for starters).
Sure. I think supply-side economics deserves more nuance than simply thinking we need to make the tax rate arbitrarily low. The Laffer curve isn't the only thing you should look at, since where you tax can be just as important as how much you tax.
Take corporate taxes for example. If one were to advocate to get rid of corporate taxes, you might think that person unabashedly biased. What kind of person would want to give breaks to the richest people (corporations) when everyday people are the most in need of those kind of cuts, right?
But the reality is that when you tax corporations, that is one of the most economically damaging taxes you can do. How about then, rather than taxing corporations, you tax the benefactors of those corporations directly? When you tax Walmart, sure you tax the C-suite, but you also make it so that Walmart can hire less people, and invest less in the economy. Rather than taxing the corporation, what if you just taxed the C-suite directly? Tax the Walton family, or the highest earning employees directly, and you get to have your cake and it too since you get similar amounts of tax revenue without damaging the economy nearly as much.
You'll see this often in the social democracies of Scandinavia, like Sweden or Denmark. These are countries with strong welfare states, and yet, the corporate tax rates are often lower than the U.S., even if you look at the most red states. This is supply side economics at work, and an example of how supply-side economics can be easily misrepresented.
You can't do that, because the Walton family and others are really, really good at avoiding getting taxed. Even small business owners like my uncles do whatever they can to avoid any sort of taxes. I never paid VAT on sport equipments or DIY equipment, which are what they sold, but we also managed for my whole school life to avoid paying VAT on school supplies, and it's probably the same for my 22 cousins. Tax avoidance is a really good hobby for those people.
The purpose of a government is not to raise the most tax money possible.
No, it's to care for its people.
And in order to do that, it needs money.
Money it raises by taxation.
I mean that’s not what Laffer curve says, the only thing it says that the revenue from taxes grows until some tax rate, above which the yield starts decreasing.
This says nothing about the wider economy nor about what the tax rate should be, and on its own it doesn’t seem too controversial to me.
You're right, it's not one lie, it's a pack of lies, trotted out every time congress needs to justify another capital gains tax cut or rationalize why the next tax hike needs to target work not wealth.
It's much more than a set of lies, it's an entire cultural phenomenon 100% USA made.
Unlike many of our worst ideas, I'm actually surprised this one didn't become more popular around the world.
I've been reading about the US progressive era of 100 years ago and I am seeing from Robber Barons many of the same arguments that I heard growing up from my Reagan-worshipping parents. It's both frustrating and encouraging to know that we soundly defeated these at one point before the pendulum swung back. They didn't invent a new pack of lies, they just put the old one in the microwave and gave it 30 seconds.
I suspect that were I to learn about the industrial revolution I would find that the US Robber Barons didn't invent their talking points either and that they simply took British Industrialist talking points and, err, gave them 3 minutes on the stove.
Worth a read:
https://www.hachettebookgroup.com/titles/brian-merchant/bloo...
That's quite funny. I recall several people not even responding but just silently staring at the proponent. Other bad ideas (like privatization) were adopted by repeating opposing talking points.
When is the last time either of those things (capital gains rate cuts, tax hikes on the lower 90% of income earners) happened?
I think it’s been decades by now.
OBBB Opportunity Zones? Bonus depreciation? If you are unfamiliar with these or their applications to tax avoidance, you are outing yourself as a wagie running defense for your economic betters.
Sorry, which of those are capital gains rate cuts or tax hikes on workers?
Those are both capital tax cuts.
The hikes on labor come later, when the debt needs to be paid and Democrats are once again tricked into being fiscally responsible.
When did the previous tax cuts get rolled back vs getting extended in perpetuity?
TCJA made changes to corporate capital gains, no?
As for tax hikes <90%, this hasn’t occurred in income; the opposite has occurred. You could make the case that it hasn’t been worth it for the poorest brackets though, given other coincident policy changes
When you are rich, it allows a lot more time and funding to come up with arguments supporting policies that will make you even more rich.
The sad part is that, with the same formula, they could generate good ideas that also make them more rich.
Yeah, but that's hard. Taking lunch money from the poors is much easier.
The article focuses specifically on the economic effects of tax cuts, concluding that they have little overall positive effect on economic or job growth. This is consistent with meta-studies looking at the relevant research. To the extent that "supply-side economics" predicts that tax cuts will stimulate the economy, it's fair to say that it has indeed been debunked.
I always like to approach this conversation with a question:
Should business that actually do create jobs in practice get bigger tax breaks?
For example, if I by some miracle create a 1 man company that makes $100 million / year profit and somebody else creates a company that makes $100 million / year profit but has 2,000 employees...should the two companies be taxed differently?
Walmart employees 1.6 million people in the US. 68% are full time. Average salaries range from $18.25 / hr (field associate) to $27 / hr (supply chain). Median $30,520 across all US employees. 156,000 employees are estimated to be enrolled in Medicaid (9.4%).
Amazon employees 1.1 million. $23 / hour average for field / fulfillment. Median $53,211 across all US employees. 123,000 employees are estimated to be enrolled in Medicaid (11.7%).
Both offer pretty extensive career development, training and tuition assistance programs.
Profit per employee:
- Walmart $10,800 / employee (1.6 million employees)
- Amazon $50,000 / employee (1.1 million employees)
By comparison:
- AppLovin $3.7 million / employee (898 employees)
- NVIDIA $2.86 million / employee (42,000 employees)
So what if we actually had a tax strategy that literally was aimed at "job creators" rather than "capital gains"? What would that look like?
It would incentivize the wrong things: All else being equal, you want to produce more with less labor and other inputs.
It’s a good thing farming needs an order of magnitude fewer farmers than a century ago.
> All else being equal, you want to produce more with less labor and other inputs
Is that actually true? Maybe I'm being dense right now but that's not completely apparent to me.
More abundance per person does seem generally better (albeit there's eventually diminishing marginal utility), but that's not the same thing as society as a whole producing more with less labor.
Maybe "all else being equal" is the operative condition here, like assuming that the economy would be able to absorb newly freed labor into new economic activity?
You can also optimize some good things out of existence in this manner, and it's still not clear that robots are going to be able to swoop in and save that kind of newly uneconomical activity, at least within my lifetime.
> More abundance per person does seem generally better (albeit there's eventually diminishing marginal utility), but that's not the same thing as society as a whole producing more with less labor.
Yes, it is the same thing. There's no difference.
More abundance per person isn't a good thing if only 1% of the population sees the benefit and everyone else is squeezed tighter.
In r>g world, this is cosmically incorrect.
That's true to a certain degree, but there's a labor supply factor involved too. If companies are rewarded for employing more people it lowers the available supply of labor forcing companies to create a more enticing environment to attract that labor (prices, benefits, etc).
It compounds if the incentive is aimed at domestic labor.
> All else being equal, you want to produce more with less labor and other inputs.
So what incentive structure would you suggest? How do you prevent the concentration of wealth that results from a business raking in millions of dollars per employee?
But this is precisely how you get these large wealth gaps in society. Not like the 1% vs the bottom 50%, but the bottom 50% vs the top 30%.
That "high efficiency" is actually "less humans in the loop".
Compare something like money managing to car manufacturing. A team of money managers might clear $1B+ in revenue for a year with a team of 200. To clear $1B a yr selling cars, you need workers and supply chains that are tens of thousands of workers deep. It's the very inefficiency of manufacturing goods that makes it so attractive to workers.
This problem is inherent and intractable, but the natural order is to whither away the inefficient parts and only keep the most functional ones.
For those reading closely, this is also how you get a begrudged "coastal elite" and populist presidents like Trump (tariffs, anti-immigrants, state backed industry) elected. They want suffering for the offices of 200 people bringing in billions, and a return of the massive factories and supply chains with tens of thousands being the ones brining in billions.
> All else being equal, you want to produce more with less labor and other inputs.
And firms are already incentivised to increase productivity, including by offshoring jobs or replacing staff by robots, because that's their profit margin. And in this case we're not concerned with firms reducing costs in general, but firms substituting capital for labour. This was an improvement for agriculture, but it was an improvement because that labour found more productive things to do...
But if you're a government those decisions businesses make don't help unless the robots or Chinese factories are considerably more efficient at making stuff than domestic labour, because a business decision that at the margin spending a dollar less on domestic labour and 99 cents more on another production input is very slightly more efficient loses the government more in income tax receipts than it gains on anything else, and usually adds to their benefit bill. Also, people don't like their jobs being replaced. (And yet ironically, tax structures are often more favourable to companies increasing the capital input and decreasing the labour input...)
Obviously it's true that you can go too far and end up subsidising firms to keep on employees that aren't doing anything useful, but relatively minor tax breaks which mainly advantage low margin retail businesses don't do that, and they're not going to stop NVIDIA being NVIDIA either. But they might make the $45k outsourcing contract not look a substantially better deal than retaining the $50k employee.
I would say a corporation's taxes should, at the very least, cover the tax burden generated from not paying their employees enough to make a living wage.
So if their employees are on government assistance, the cost to provide that assistance is inherently their burden. One way or another, every employee they employ will be earning a living wage from them.
I don't even care about overlap. If both Target and Walmart have to pay the difference between the full cost of government assistance for the same person, that's fine. Build a fucking library or something.
That's an interesting view though.
If Walmart employees somebody who's part time and is on Medicaid are they on Medicaid because of Walmart or because they couldn't commit to enough hours to go full time? 9% of 1.6 million employees on Medicaid means they are employing over 1.4 million people who are not on Medicaid, all of whom are taxed for income, payroll, property, sales, etc.
If Walmart decided tomorrow to terminate all employees who were collecting Medicaid so that they could avoid a tax increase for that stat would it be a good thing? Is it better for a company to avoid hiring at all, even part time, if they can't fully purge the employee from government assistance?
The number of Walmart workers on some form of government assistance is significant.
Significant enough that Walmart couldn't operate without them. Not to mention, Walmart manages to capture those government dollars through accepting EBT and such.
And the goal is to make WalMart pay regardless of how they try to weasel out. If you say "only full time", then they employ thrice as many people and give no one enough hours to make a living. Same if you prorate to hours worked.
Essentially you need to stop inventing rules and systems that can be gamed. Because Walmart is incentivized to game them. Push them in the direction of hiring people full time and paying them a fair wage for their time.
> The policies of supply-side economics, however, are much more defensible, but it seems people would much rather pick on the strawman.
Lowering taxes is one of the policies of supply-side economics:
> Supply-side economics is a macroeconomic theory postulating that economic growth can be most effectively fostered by lowering taxes, decreasing regulation, and allowing free trade.[1][2]
* https://en.wikipedia.org/wiki/Supply-side_economics
Along with decreasing regulation and allowing free trade, so you've just knocked down one of the reasons to think about supply-side stuff seriously.
So no candidate ran on tax cuts? Explicitly for high income earners?
The actual paper never uses the phrase trickle-down economics and just covers how tax cuts for the rich don't improve the economy but does increase income inequality
I mean, when I googled supply-side economics it said it was another name for trickle-down economics. I'm interested in how you'd say they differ, honestly, not trying to be argumentative.
I found at least found one analysis (by a left leaning think tank, so take it for what you will) https://www.americanprogress.org/article/the-failure-of-supp... that seems to show that supply-side economics hasn't panned out.
It seems obvious that there is an optimal tax rate, too much or too little is bad. But I'd definitely say right now we are far far on the too little side of things.
You’re describing the Laffer curve.
Much of Reagan’s trickle down stuff was based on the idea that we were on the wrong side of the peak.
Yeah, I intentionally referenced the Laffer curve. Essentially I think folks use it to only argue for less taxes, but I think it applies both ways.
I think there's also the consideration that the Laffer curve is very Ceteris Paribus.
In reality higher taxes implies higher spending, and different countries spend differently. It's entirely possible that the peak of the curve moves based on where you plan to spend the money. If you proposed a 5% tax increase to build the supports to take on Taiwan in semi, then you probably have a curve that looks different than a 5% tax increase to start a war.
Exactly: in political rhetoric, the Laffer Curve is 5% an honest examination of tax tradeoffs and 95% a trojan horse designed to smuggle into the conversation the assumption that we are on the "drowning in taxes" side of the Laffer Curve.
It’s not even honest on the tax trade offs. Total tax take is not a constraint on public provision in a floating exchange rate economy.
I don't know where you're looking, but if you go to the first result for trick-down economics, the Wikipedia page, within the first few lines it mentions how the term is used, and how it was created by detractors of supply-side economics. It's never been a real policy.
If you similarly look up supply-side economics, at the top of the Wikipedia page it says I'll happily take you on your word that you're not trying be argumentative. It's certainly not your fault that this strawman has been so widely spread that people think it's a real policy idea now. It is confusing to me too.As for whether supply-side economics actually works, to say it "hasn't panned out" I think, is really oversimplifying. Has capitalism (efficient markets but also environmental decay) worked? Has socialism (universal healthcare but also the military) worked? It depends on who your asking and in what regard. In some ways yes and in other ways no. The category is too broad.
Also, just as important as how much we tax is where we tax. Carbon tax (very good) vs stamp duty tax (very bad). Competent policy often allows you to have your cake (supporting government services) and eat it too (not sacrificing growth).
What is the difference between how trickle-down economics is portrayed vs. the actual ideas of supply-side economics? You have to specify how / in what way it's a strawman
I have literally seen it being defended, in all seriousness, after the economy crash. When the financial institutions were bailed out.
Maybe not the name, but the literal idea that the money given to them will flow down. There were even graphics gping with it. Again, in all seriousness.
So yes, it needs to be debunked.
I think a large part of the issue, ignoring the self-interest one (certainly those of money will argue that their taxes should be less) is that both the supply and demand side can interfere with the proper functioning of the economy
My quick take is that during the 2008-ish great financial crisis, those in power were children of the 1970s supply-side shocks (demand>supply resulting in shortages and inflation), and used precisely the wrong tool to handle the demand-side shock of the GFC: interest rates were zero-to-negative, indicating a surplus of investable cash and no place to put it to work, and policymakers responded by...cutting everything on their side to the bone as well (austerity). At a high level: the economy was literally trying to pay the government to spend money on productive investment, but this once-in-a-lifetime opportunity was largely squandered
This is ridiculous. "Trickle-down economics" is just another name for "supply-side economics". You can also call it "voodoo economics", as George H.W. Bush did. They're all referring to the exact same failed policies that have been criticized for failing to achieve what they claim to achieve for 130 years.
Trickle down economics is just another name for supply-side economics. They're one and the same. The difference is that the name "supply side economics" focuses on the the beneficiaries while the name "trickle down economics" focuses on the results.
Supply side economics owners claimed that benefits would "flow" down from the capital owners. The pejorative name "trickle-down economics" accurately reflects that the quantity of benefits that "flows" down to everyone else from those benefiting from massive tax cuts is a mere trickle of the money that the supply side saved from the tax cuts.
this is correct. i suspect many simply do not know this because the straw-man is so pervasive.
The current issue I feel with taxing is that, at least in USA, it mostly taxes based on Salary on Employees, but never tax on the capital or the actual wealth.
Tax the rich means: Increase W2 tax and property tax which, takes money away from me to feed lower middle class
Tax cut means: Reduce the estate tax and cooperate tax, keep the W2 tax flat, and cut the benefits that most critical to the bottom: Food stamps while keep other unnecessary programs unchanged: Discounted Toll for low income when driving in HOV lanes.
> The average citizen seems to be fairly poorly informed that taxes on the rich have fallen really dramatically in the past 40 years.
There's an observation.
The paper talks about economic growth, income distribution and unemployment.
I'm mostly interested in economic growth, so looked at what the paper claimed about that.
It found that major, sudden reductions in taxes on the rich did not have any statistically significant effect on the trajectory of economic growth over the following five years.
But:
- Their sample is small. They only looked at relatively large, discrete declines in their home-grown measure of taxes on the rich. They did not look at all tax-rate changes.
- They did not look at effects beyond the five-year horizon, which means it would probably exclude the impact on people starting startups, as the successful ones usually take more than 5 years to start making serious money. (or did during the period the paper considered, even if timelines have subsequently accelerated.)
- Big sudden tax cuts don't happen in a vacuum, and I don't see a way to control for confounding.
The question I have is that at some point X taxes are collected and the economy is growing at Y, then the policies change and now X-5 taxes are collected and the economy grows at Y. What was the function of the 5 under the first regime?
Slowing the growth of the country’s debt. Some would argue this gives flexibility to expand that debt during crises like wars, economic events, or pandemics; by “keeping powder dry” in terms of debt to GDP.
Are you thinking specifically of the US or you thinking of all the countries that were part of the data they reviewed? Also, how does leaving the wealth in the hands of citizens prevent it from being taxed in the future if needs be?
The rich don't pay income tax like us little people do, they don't pay capital gains tax like us either.
They can avoid both through schemes such as taking low salaries and borrowing against assets they will never sell for a profit.
The tax system would need a complete overhaul to plug those holes, but it would always be a game of whack-a-mole.
A lot of the poor and middle classes don't understand how a billionaire earning millions of pounds per week in passive income is any problem for them - or where it comes from
1, billion, 2 billion, 100 billion individuals makes no difference to the average person
In fact there's a misguided sense that they earnt that money through work and not rent seeking
But the sad truth of the matter is - the rich are on the other end of your mortgage or indirectly your rent - the other end of that business loan to your favourite coffee shop controls the price of your coffee - you pay them interest directly or indirectly through everything you pay for and they use that money to buy more of the assets you use - they are a massively increasing rent seeking class
Their wealth growth is exponential it compounds on itself some particularly rich people are seeing 40% annual returns and the overall economies wealth growth is 1 or 2%
It's analogous to a black hole things like capital gains tax and income tax mean nothing to these people because they don't sell and they don't have a "working" income because that's not how the ultra rich accumulate wealth
The sad thing is for people on benefits the government look automatically into your personal bank account and track anything coming in - they have built a massively invasive infrastructure to track the poor so they can remove their benefits if they try to earn £5 selling music or selling IT services - but if you're rich the government don't even know how wealthy you are - the government doesn't know how many billionaires there are - let alone any talk of having to tax them - so they get to pay very close to - if not nothing - whilst software engineers (as an example relative to this forum) in the UK get to be the high rate tax payers where 50% or more is taken
Everyone else has to fund their free ride and its absurd - they're the group that need the least support financially
Quelle surprise!
This is basically what happened in Orbán's 16 years in Hungary. He gave indirect tax cuts for the rich, or just generally everyone who is not living pay check to pay check (by hungarian standards it means you are rich). So for example installing solar panels came with a tax writeoff but the whole thing was setup that it only benefit who already have had enough money to install a full brand new solar panel system. So it didn't help at all those who are really in need. Same happened with EV cars. If you already have money for a brand new EV car you got it cheaper. For the rest? Good luck. Mind you this is eastern Europe where everyone is driving +15 year old diesels from Germany. The rich got richer.
Same in Finland. The ruling party (represents the rich and the business owners) gave tax cuts for rich (high income earners and and those who have capital gains). Next they're planning to cut the business tax 4.5 percentage point. Eroding tbe states tax income while the state is already in the hole with a ton of debt. Of course the story is that these will kick off investments and make business boom. Best part is that to compensate for the tax cuts they're gutting the benefits including social security, unemployment benefits (highest unemployment in Europe btw) and calling those people lazy who just need "encouragement" to start working. A real hero pasty.
Similarly incentives to buy EVs naturally only apply to the folks who are better off. Most working class buy cars that are +10 years old. (The average car age is among the oldest in Europe btw)
Ehh, I don't know if those examples really apply, even if they effectively have a similar outcome. Incentives for environmentally friendly tech are more about helping those industries get off the ground against entrenched incumbents that are harmful to everyone. The benefit of less exhaust in the air is immediately good for everyone.
Although I'm sure government and corporate greed was able to exploit those policies as much as it could.
Subsidies for electric car and solar panels on private house are a very specific loyalty rewards. No random person receives it, the requirements and bureaucracy are impenetrable.
The same in Poland. Poland, Slovakia, and Hungary are oligarchic corrupted disfunctional hellholes. No, electing this new politician and party will not change anything. Without "license to steal and defraud" your life there will be miserable. Hopefully Russia will not take the easy opportunity and attack, but hey at least they'd erase the local "elites".
Well, yes — much like trickle down economics.
Yeah, turns out the trickle is just piss.
the rising tide that's supposed to lift all boats? also piss.
Whole life had the don't piss in water anxiety, only to realize that everyone does it and I'm swimming in it.
"We'd been floating on inner tubes on the river for 8 hours, drinking beer, and I realized that not once had any of my friends gotten out of the river to pee."
---ron white, upon experiencing a flash of enlightenment. quote from memory.
Its been trickle up economics for a long time now.
In other news, the pope is catholic
I also heard that every 60 seconds in Africa, a minute passes
No se podía saber
I think the real issue in the UK is the definition of "wealthy". The government seems to think it's people making more than 50k...
In Germany it's 90k EUR, in Poland it's a mere 30k EUR gross on employment contract. No it's not a coincidence, the government knows what they're doing. In short, they are not friends with those on employment contract in private sector.
In UK though the salaries are fixed at 25k GBP annually until forever, they simply like this number.
Just for context: for an average single paying tax class 1 that’s 4.4k net per month, while the median working single earned 2.2k net in 2025.
Source: https://www.destatis.de/DE/Themen/Gesellschaft-Umwelt/Einkom...
Meantime the average German billionaire, which Germany has the highest number in Europe: [awkward look monkey puppet meme]
But hey it’s for the greater good eh, like Effective Altruism that people like Dario or Peter Thiel have been really obsessed with.
All the brain dead marxists here - please remember, any artificially promoted slogans whether it’s “tax the rich” or “cut the taxes” are there only to get your votes. The real problem is never as simple as turning few knobs.
No shit. If you want a tax cut to have an economic impact, cut taxes for the poorest, the ones with the least disposable income.
EDIT: Seems like the article is suggesting that giving more disposable income to the rich, results in them using that extra income to buy capital rent seeking assets. So it is a double fuck you to the poor. Because not only do the rich end up paying proportionally less in taxes, but they also use the extra money to compete with you for your home, buy the home and rent it back to you, putting you in an even worse financial situation.
it really does trickle up, and the greater percentage of their income the beneficiaries spend on consumables the greater the upward benefits.
More "vacuumed up" than trickled
Take the inverse stance: take a country that taxes its citizens to death, like France or Belgium. How are they doing? Very badly.
France is concerned that the IMF main jump in and take things under control because the government's public deficit is out of control. With a GDP of about $3.6 trillion (american trillion, not french) and public spending representing, officially, 57.2% of those $3.6 trillion, that's a cool $2 trillion spent, yearly, by the state. This is where wealth goes to die.
If you were to seize, just fully seize (and consider it's liquid, which it is not), the wealth of all the billionaires in France (there aren't even 50 of them) you'd end up with $500 billion.
So if you were to just take all the wealth from all the french billionaires, you'd only pay a quarter (!) of the budget of the french state. For one year.
And that's it. 25% for a year.
Another way to see it: the french public deficit is more than $100 billion, yearly. If you were to seize the wealth of all french billionaires, you'd only have enough money to prevent the public debt from growing (which has to be at around 140% by now) for five years.
I'm not listening to talks about "taxing the rich" anymore until that caste called politicians stops spending money it doesn't have, enslaving future generations that shall be taxed to death to pay the insane public debt their governments are creating.
Wanna talk about what's happening to the city of Brussels (Belgium), my native city? 40% right at the poverty line. Immense deficit. Conditions of living going down the drain. First political party in the poll is now the PTB, a full on communist party (and communist in the EU have noticed that, at the moment, they could get the votes of islamists, so strangely enough in a "the enemy of my enemy of my friend" way, communists in countries like France and Belgium happen to be very welcoming to religious extremism [in France the communist party literally has been forced, when it created a coalition with others party at the left, to sign a paper saying it condemned islamism terrorism for they've been so cosy with the idea that it really wasn't clear at all that they actually were against islamist terrorism]).
And you want to get me started on that wonderful discovery the left made recently: that by importing millions of poor migrants and then giving them the right to vote, by a very surprising coincidence these poor imported migrants happened to not vote for the right?
How... Convenient?
Several countries are discovering that: "you eventually end up of the money of others" and "when the rich becomes poor, the poor dies".
The one thing that really irks me in this is the full-on hypocrites I know who believe that anyone richer than them should be taxed to death: to them "trickle down economics" do not work but that they live a middle-class lifestyle more preposterous than 99% of the planet doesn't bother them. They want lower taxes but not for those richer than they are.
I cannot understand that mindset.
I hate the Zuck: really, screw that guy and his faked 3D legless avatar demo for his dystopian VR world (how did that one turn out btw? As well as the Meta AI race?) and screw his PHP+JavaScript "punch the monkey" abusive ad world. Just fuck it. But I don't give a single crap in the world that he's got two $250 million Yacht or whatever they cost and however many he's got.
Good. For. Him.
I'd rather be poor and free than live under communism. And doubly so if we're talking about living in a society dictated both by religious intolerance and communism (which is where several countries are headed).
And if you want to "help the poor", go give all your money, open your house/appartment to pooor migrants and give me a fucking break.
You should include other countries for reference. The US has approximately 390x that amount of debt (only 5 times the population) and the average person is economically much worse off than all the European countries you just mentioned.
We literally spend more government money per person on healthcare than France does while having less public healthcare, precisely because of the "help the rich" policies causing most of that public money to go to subsidizing insurance companies.
> the average person is economically much worse off than all the European countries you just mentioned.
Where on earth did you get this idea? US Households have much higher disposable income (~50% higher than the Western European average) and much lower household debt levels than the average Western European country. See OECD links below.
> We literally spend more government money per person on healthcare than France does while having less public healthcare, precisely because of the "help the rich" policies causing most of that public money to go to subsidizing insurance companies.
Is this shocking display of government incompetence supposed to be an argument for increased spending, more government involvement, or both?
https://www.oecd.org/en/data/indicators/household-debt.html
https://www.oecd.org/en/data/indicators/household-financial-...
https://www.oecd.org/en/data/indicators/household-savings.ht...
https://www.oecd.org/en/data/indicators/household-disposable... (Select 2024 to see US data included)
7x not 390x
The US public debt is $39 trillion. The figure quoted by the parent comment is $100 billion
So the politicians waste money and your conclusion is it’s the private sectors fault??
Well said. People won’t like to hear it but it’s true. If you seized the wealth of every billionaire in the US you could fund the federal government for about a year. Of course most of it is not liquid so in reality much less. So when people talk about how we need to “tax the rich” and our problems will be solved I assume they're lacking in political knowledge. Or they just see it as a form of punishment for daring to accumulate so much wealth.
Wealth of this nature is not accumulated; it is extracted.
It’s actually created.
The most effective economic policy to help the impoverished is to tax the rich and give the money directly to the poor.
The only reason this isn't common sense is because the rich have fought it for millennia.
The poor will then give it back to the rich in higher prices for the same amount of stuff.
The only real way to tax the rich is to ensure that the rich have to compete for workers by paying competitive wages
This makes the false assumption that all the money given to the poor go back into high margin goods that the rich profit from? it ignores competition, ignores productivity gains by a lesser impoverished population, ignores the impact on small businesses...
there are all sorts of losses inherent to poverty that shouldn't be discounted, like the inability to save via bulk purchasing, transportation, high cost credit, preventative spending, time losses...
in theory eliminating the poor by literally giving them money could have an impact that makes society better for everyone... it's very reductive to assume there's just one big knob that the rich can turn to get it all back
The rich own things. They collude. You hit them with costs and they put the price up which is validated by the extra money given to the poor, or by wage suppression as there aren’t enough jobs to go around.
Taxes on the rich are like increased power bills. Businesses pass on costs at a markup.
They can do that because you need a job to eat and they only need to hire if there is a profit to be had.
It's called inflation. If you helicopter money on people they will bid up the prices of everything that they need. We had an experiment with this just a few years ago.
except that the biggest handouts during covid went to businesses, not people... so we didn't really, it was also a very supply constrained economy which was unique to the situation
at the very least locking up a trillion dollars with some douchebag isn't a reasonable strategy against inflation
And by making it so that an employee can safely quit at any time without losing their ability to, you know, not get blasted by insane surprise bills - e.g. healthcare.
Doubtful. The UK is practically at this point with generous benefits and a very progressive tax curve (you don't pay any tax on the first £12.5k of earnings).
It seems like all it does is lock people into poverty with unreasonably high effective marginal tax rates.
Giving tax cuts to public companies allows anyone to invest in them and benefit from that.
Also just because someone benefits, that doesn't mean that other people have to suffer.
They're literally argue the opposite in the paper... when taxes are lowered, executives demand higher compensation, at the expense of their employees.
You have to have enough liquid to be able to invest.
If basic needs aren’t being sufficiently eased, there’s no money left to invest.
Enough liquid = $1. That is not insurmountable barrier. It's 25% of the price of a single burger at McDonald's.
Can we please tax the negative effect that big money has on the rest of us?
I mean I'm perfectly fine with people who work hard making a lot of money. But that changes once that money is used against me. From that moment on I want to be compensated for damages, and the best way to do it is through taxes.
Problem is those taxes just get funneled to things taxpayers don’t even support.
I want a system that taxes things we don't want (unproductive rent-seeking) and doesn't tax things we do want (productive stuff e.g. income tax).
I don't want to be personally compensated. I just want to live in a society where people's basic needs are easily met: clothes, food, medicine, housing. The current landscape is, by the day, increasingly dystopian.
I'm in favor of raising the income tax for David Hope to 110%.
The scientists who worked for the cigarette companies couldn't find a link to cancer. Economists who work in academia can't find working economic policies for the same reason. Private sector economists on the other hand...actually place bets and get rewarded or punished for being wrong. Not shockingly, they have very different opinions from the academic economists.
PS And you wonder why Mississippi is richer than the UK.
PPS The Laffer curve is real, has a mountain of evidence and disproves this paper.
I thought the scientist who worked for cigarettes companies did find a bunch of links but the companies squashed the results. It’s pretty famously known that they knew cigarettes were bad for you decades ago.
Yes, tobacco companies knew the health risks at least back tot he 70s, if not the 50s or 60s.
And in the late 70s, they launched Operation Berkshire as a bulwark against negative press and government regulation.
They have literally been found guilty of conspiring to suppress the health risks.
If we're really doing these comparisons, the think tanks that wrote policy pieces for the cigarette companies talking about the evils of regulating tobacco were also particularly passionate about tax cuts for the wealthy benefiting everyone...
every single time taxes for the wealthy were cut, it was argued that the laffler curve would make up for the loss in federal tax receipts, thus leaving us with the same level of services and a larger economy.
every single time its resulted in lower tax intake compensated with more deficit spending.
Everytime we increase taxes past the optimum point of the Laffer curve, the government takes in less total tax. If you aren't past the optimum point, it won't. And your claims about loss of collected taxes haven't really ever come true at the US federal level. Total tax receipts in the 1980s were very high and there were several major tax cuts then. The same pattern usually follows, but the effect of the Laffer curve was deformed during the 1990s due to the dot com boom. Tax cuts in the 2000s increased tax receipts. The Trump cuts in the late 2010s did the same.
The last 6 CA tax increases all resulted in less taxes being collected the following year. Now there are multiple things that can impact total tax collected for CA (mostly the S&P500), but those factors all varied in those 6 tax increases. As for federal tax, if a tax cut doesn't result in an increase in taxes collected, then you are likely below the optimum point in the curve.
PS The government doesn't have a tax collection problem, it has a spending problem. On average, every public sector job costs 3 jobs in the private sector. If the size of a government is choking the economy, then messing about with the tax rate won't fix the problem.
> And you wonder why Mississippi is richer than the UK
Because Mississippi didn't have Brexit /s
All jokes apart I don't see any real evidence that Mississippi is richer than the UK. Their median household disposable income is pretty damn close ($49k vs $54k). The UK has a better social and health safety net (where would you rather be unemployed or disabled?).
Mississippi has much lower life expectancy than the UK (69 vs 79 for men). Crudely speaking a Briton makes $5k less/year but lives 10 years longer - a trade almost anyone would make in a heartbeat.
I won't bother digging into other quality of life indicators vs economic indicators but I expect Mississippi will be mostly equal or worse.
On average Mississippi may have higher dollar numbers on a spreadsheet. That doesn't mean squat for the ordinary person on the street. If anything this is an argument against trickle-down economics/the Laffer curve.
Mississippi has far better food and better weather so I don't think life is better in the UK. Also, I have no idea where you got the life expectancy number from, but its not current. I suspect its just a bit old. Its currently like 74 and mostly that's the effect of the Oxy epidemic which is going away with time.
I have been to the UK and I have been to Mississippi. Quality of life in Mississippi is far higher unless you really really like musicals (London is big for those). Mississippi has a better history of music and writing over the last 100-150 years. The food is cheaper and far more tasty. The weather is warm and winters are mild. They generally don't get natural disasters unless you live right by the coast and even then its once in 70 years. The health care is far higher quality. The people are warm and friendly. And the cost of living is lower.
The British are known for being miserable for a reason.
None of these reasons have anything to do with economics. They are personal preferences.
fwiw, we get bad hurricanes more than that and also the mid-south is the new tornado alley. there was a very bad ice storm this past winter. natural disasters happen everywhere. and it's hot AF in july and august, like so hot that you stay inside all day.
Tell that to someone from Oklahoma and be prepared to run. Also, AC is cheap and available everywhere.
PS We had bad ice storms where I live (certainly far worse than MS) 2 winters ago. I wouldn't call it a natural disaster.
PPS Remember we are comparing the weather to the UK, not Hawaii or San Diego.
Oh, and post-war British music wouldn't exist without Mississippi. Pink Floyd is literally named after 2 musicians from Mississippi. The Beatles musical style started out by copying music from Mississippi. And the list goes on from there. Just saying, large chunks of British culture are copied from Mississippi and the surrounding areas.