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The economic consequences of major tax cuts for the rich

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Re: The economic consequences of major tax cuts for the rich

#11

Post by subroutine »

nathan_phoenix wrote: post #2

> We find tax cuts for the rich lead to higher income inequality in both the short- and medium-term. In contrast, such reforms do not have any significant effect on economic growth or unemployment. Our results therefore provide strong evidence against the influential political–economic idea that tax cuts for the rich ‘trickle down’ to boost the wider economy. The conclusion taken from the abstract.

As part of the series on "Rising tides not lifting all boats", and "tax cuts for the rich don't tend to trickle down"...

https://cushman.host.dartmouth.edu/books/CommonSenseFM/Chap5...

Re: The economic consequences of major tax cuts for the rich

#12

Post by nickff »

slickdork wrote: post #7

Question I'm asking in good faith: will this proof have any consequence for the bottom 99.99%? Is there a way this research helps shape policy?

It's not a 'proof', it's a statistical study, and econometrics rarely convince anyone of anything.

Re: The economic consequences of major tax cuts for the rich

#16

Post by nightski »

subroutine wrote: post #11
nathan_phoenix wrote: post #2

> We find tax cuts for the rich lead to higher income inequality in both the short- and medium-term. In contrast, such reforms do not have any significant effect on economic growth or unemployment. Our results therefore provide strong evidence against the influential political–economic idea that tax cuts for the rich ‘trickle down’ to boost the wider economy. The conclusion taken from the abstract.

As part of the series on "Rising tides not lifting all boats", and "tax cuts for the rich don't tend to trickle down"... https://cushman.host.dartmouth.edu/books/CommonSenseFM/Chap5...

That same saying could be used for the other argument. Rising taxes not lifting all boats. Taxes for the rich don't tend to trickle down.

Re: The economic consequences of major tax cuts for the rich

#17

Post by ajsnigrutin »

I live in a former socialist country, with current "left" (red star in the logo) parties, who scream a lot about "tax the rich".

In reality, if you look at their proposed policies:

* nothing happens to the poor (since they already pay almost zero taxes)

* nothing happens to the rich, because they start a company in bosnia, or delaware or panama (I have no idea how the panama papers were forgotten by the people and the media), funnel the money, and again pay (almost) zero tax

* and me, an engineer with an above-average paycheck, but way below "rich"? I get fucked with the higher taxes.

I don't need the rich to have higher taxes, I'd be happy if they atleast paid the current ones, or atleast the same percentage of income (in real sense, not accounting sense, since there are many ways to earn very little on paper, but buy a lot of stuff with that) as I do.

Re: The economic consequences of major tax cuts for the rich

#18

Post by justinzollars »

I used to believe taxes were a good way to redistribute wealth. That is until I moved to San Francisco and saw how a welfare super state prioritizes its spending. $75,000/tent/year homeless camping sites, 2 million heroin needles, community ambassadors who aimlessly wonder the mission district with multilingual pamphlets on how to sign up for welfare benefits. Billions funneled to nonprofits, who in turn support politicians. Lavish state retirement benefits at the expense of cutting community services.

Sure, raise taxes on the rich, but the plot is lost.

Re: The economic consequences of major tax cuts for the rich

#19

Post by deltarholamda »

carbonguy wrote: post #3

From the abstract: > We find tax cuts for the rich lead to higher income inequality in both the short- and medium-term. In contrast, such reforms do not have any significant effect on economic growth or unemployment. Our results therefore provide strong evidence against the influential political–economic idea that tax cuts for the rich ‘trickle down’ to boost the wider economy. I'd be interested in hearing from those…

In the distant--but not too distant--past, "the rich" often meant business owners who might make a lot of money, but employed a lot of people. The idea of cutting taxes would mean more available capital for business expansion.

It's not really the case so much anymore. A decent Silicon Valley salary would put you in the top 10% of earners, and a Python programmer doesn't usually hire a lot of people. Top 1%ers tend to be of the financial rent-seeking sort, who might hire some people, but they're not expanding the concrete pylon plant to another state or anything like that, which would expand middle class wages and/or employment.

The gutting of the industrial base since Reagan cut high tax rates for the top earners demonstrates that things don't always work out how you expect.

Re: The economic consequences of major tax cuts for the rich

#20

Post by nodesocket »

I'll approach this from a different perspective, in the last 20 years can pro-higher tax proponents provide proof of a single program that actually improved the quality of life of US citizens in the middle class? I suspect, many will spring up and suggest Obama Care, but where is the data to support this? I know myself and my families health insurance continues to rise and rise (self employed). My mother is on Medicare and pays absurd prices for her diabetes medication and testing equipment (smart device). Democrats continue to fail to address the costs of medical care for middle class and even upper middle class. There are programs for low-income but once you reach middle class levels all these programs no longer qualify.

We all work hard for our money (ok maybe not all), but my mentality is let me accumulate as much wealth as I can (I'm better at investing and returning yield on money) in my younger years. I'll make the decisions which programs/charities and people I wish to support.

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