It should be pointed out, the rich does not refer to the 1-10%ers as many HN visitors are.
It refers to the ~0.01%.
I'm sure many of us are unhappy about losing the SALT Deduction under Trump.
50 years of tax cuts for the rich failed to trickle down, economics study says
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Re: 50 years of tax cuts for the rich failed to trickle down, economics study says
#32The rich prefer to hire armies of accountants and lawyers to design the most hermetic pipeline funelling out everything they consider to be an excess. There is not a single droplet dropping, how could anything tricke down?
Re: 50 years of tax cuts for the rich failed to trickle down, economics study says
#33Now that the rich are used to lower taxes, if the government raises them won't the extra costs they incur just end up being passed down to the consumer via higher cost of goods/services from the businesses owned by said rich people?
Assuming that simple model was correct, wouldn't that then mean that in order for the consumer to be able to afford such goods and services the would, in turn, have to be paid more?
It's not like the American consumer is a tremendous store of surplus value, especially given that they have effectively no saving on average and rising debt.
If the wealthy conspire to charge more because of income lost to taxes, then the labor class will simply have to consume less or somehow make more. As far as the former goes, historically capitalism doesn't do great when it decreases the material conditions of workers (which is what forcing decreased consumption leads to).
Re: 50 years of tax cuts for the rich failed to trickle down, economics study says
#34Wouldn't trickle up economics work better? Poor people have more unmet needs and more likely to spend any extra they get into the economy.
That’s effectively what Nick Hanauer has been saying more recently but I believe we are too far gone at this stage.
The US government is very capable of handing out $1200 checks to everyone as we have seen. It is also extremely popular with the people. I mean I guess the only impediment is courageous politicians but that might be a large obstacle.
I wonder if they gave out the $1200 checks every year and funded it by taxing the top brackets, that would cause a large surge in consumer spending (mostly on essentials but also on luxury goods as you go up the income bracket).
Re: 50 years of tax cuts for the rich failed to trickle down, economics study says
#35Now that the rich are used to lower taxes, if the government raises them won't the extra costs they incur just end up being passed down to the consumer via higher cost of goods/services from the businesses owned by said rich people?
You can't just charge more because you're mad and want more money, at least not if you expect to continue to be competitive.
Re: 50 years of tax cuts for the rich failed to trickle down, economics study says
#36This is only tangentially on topic, but I genuinely wonder about this. When people state that they want the wealthy to pay their fair share, the first two questions I have are, what constitutes wealthy and what constitutes fair?
Let's take a specific person as an example of wealthy (let me know if you don't agree), and I'd be grateful to hear your thoughts:
Wealthy Person X:
- CEO, 55 years old, University of Illinois grad in bio-chemistry, put self through college working
- Works 60 hour weeks, most Saturdays, some Sundays
- $1,500,000 salary + stock benefits
- Net worth $8,000,000
What is X's fair share in Federal Income Tax?
Re: 50 years of tax cuts for the rich failed to trickle down, economics study says
#37Perhaps I'm having a Mandela Effect moment, but hasn't "trickle down" been debunked before this study...repeatedly? Not just "no shit", but actual studies and stuff? Regardless, Will Rogers is credited with the phrase "trickle down" to refer to supply-side economics, so it has gone on longer than 50 years. Mr. Rogers also did not mean the turn of phrase to be complimentary.
It's just an excuse to justify selfish tax policy that favors the wealthy. It obviously doesn't work because the wealthy don't have to invest into domestic jobs. They can also use their money abroad. If you give them more money they are just going to spend more of it outside your country. The opposite is also true. The vast majority of consumers spend their money domestically. Yes the products they buy are often impo…
In fairness, we could and should also charge adjustments for goods and services produced that don’t meet some standard for labor and environmental standards so American companies can compete (for example, a border-adjusted carbon tax). Similarly, end the subsidies that allow for cheaper shipping from China than a neighboring state.
If anything, I would expect “trickle-down economics” to have reduced globalization, since it allows for cheaper American labor. Of course this doesn’t mean we should embrace trickle down policies, but that we should make sure we prevent jobs from flooding overseas as we dismantle them.
Re: 50 years of tax cuts for the rich failed to trickle down, economics study says
#38This will not be a popular thing to point out, but trickle down theory was never an actual theory. As far as I understand nobody actually advocates for this theory on a serious level. Plenty of contemporary economists such as Joseph Stiglitz, Alan Blinder, and Paul Krugman denounce this as a non-existant theory.
Re: 50 years of tax cuts for the rich failed to trickle down, economics study says
#39The rich prefer to hire armies of accountants and lawyers to design the most hermetic pipeline funelling out everything they consider to be an excess. There is not a single droplet dropping, how could anything tricke down?
Cars, computers, cell phones, rockets to mars, etc... all exist because rich people bought the super expensive first versions or funded their development. We all benefit from those things greatly.
Re: 50 years of tax cuts for the rich failed to trickle down, economics study says
#40Perhaps I'm having a Mandela Effect moment, but hasn't "trickle down" been debunked before this study...repeatedly? Not just "no shit", but actual studies and stuff? Regardless, Will Rogers is credited with the phrase "trickle down" to refer to supply-side economics, so it has gone on longer than 50 years. Mr. Rogers also did not mean the turn of phrase to be complimentary.
> Perhaps I'm having a Mandela Effect moment, but hasn't "trickle down" been debunked before this study...repeatedly?
The idea has been around in some form or another for a long time:
* https://en.wikipedia.org/wiki/Trickle-down_economics#History...
The most recent reincarnation was known to be not very good economics from the get-go:
> What I want to talk about is when, exactly, the GOP went over the edge. Obviously it didn’t happen all at once. But I think the real watershed came in 1980-81, when supply-side economics became the party’s official doctrine.
> I’m not sure, even now, whether people who aren’t involved in economic policy discussion understand that supply-side wasn’t a doctrine like monetarism or even real business cycles — ideas I may think are wrong, but which had and to some extent still have significant support from professionals in the field. Supply-side economics never had any evidence behind it; it never had any support in academic research; it barely even had any support among economic researchers and forecasters in the business world. It was and remains crank economics pure and simple, with nothing going for it except political convenience.
> Yet 35 years ago the GOP was already willing to embrace this doctrine because it was politically convenient, and could be used to justify tax cuts for the rich, which have always been the priority.
> And given this, why should anyone be surprised at all the reality denial and trashing of any kind of evidence that followed? You say economics is a pseudo-science? Fine. First they came for the economists; then they came for the climate scientists and the evolutionary biologists.
* https://krugman.blogs.nytimes.com/2016/07/18/the-gops-origin...
He has an entire section on this in this recent book Arguing with Zombies, along with how the GOP are worried about deficits and debts when they're out of office, but then don't once they're in power (e.g., tax cuts in the December 2017 budget):
* https://wwnorton.com/books/9781324005018
* https://www.worldcat.org/title/arguing-with-zombies-economic...