Quote:
Originally Posted by Mathgod
https://en.wikipedia.org/wiki/Trickle-down_economics
Trickle-down economics generally refers to the practice of cutting taxes on the wealthy, in hopes that doing so may result in increased economic activity and a trickle-down effect which benefits all. Time and time again it has been shown that this kind of blanket approach generally leads to massively increased government deficits, exacerbated wealth inequality, and much less economic stimulation than expected.
Perhaps you accept a broader, much more general meaning to the term "trickle down economics", in which case there was no intent on my part to create confusion, and I'm sorry if I did.
Can carefully targeted tax cuts sometimes, in some situations, lead to a net benefit to society? Of course they can. But as others have mentioned, they have to be done smartly and with careful situational consideration.
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There are situations where trickle down economics works.
There are other situations where it doesn't. My point is that the current state of affairs is not caused by the failures of trickle down economics. It is caused by an ever decreasing tax base for the wealthy, and not an issue changing tax rates.
Specifically, what we've done is allowed the concept of a corporation to be abused, so that the wealthy can hide funds in these corporations, which was not their intended use. Increasing marginal tax rates only makes it tougher for middle class workers to get ahead or start their own businesses.
Then you combine the corporate issue with ultra low interest rates that allow the wealthy to take ELOCs on existing assets and "re-invest" those funds, and we end up with today's mess.
In other words, I find this study to be a vast oversimplification of a far more complex, yet blatantly obvious, issue. The statement that we should avoid trickle down economics is downright dangerous, and the study doesn't even say that. In fact, the study doesn't use the term a single time.