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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

#111

Post by 0x6862 »

jariel wrote: post #81
partiallypro wrote: post #68

Earlier quoted context omitted.

"Trickle down" is an economic slur, it's not something economists believe. It's just what some people call a certain policy set.

The term they use is 'supply side' economics - meaning, you support businesses with tax cuts, subsidies, Quantitative Easing, then the 'core' economic mechanisms are healthy, people get hired (i.e. trickle down). As oppose to 'demand side' i.e. give tax cuts or money to the poor - they spend it, the economy grows.

You forgot the big one - regulation. Supply side is about making it easier for people to produce. You won’t find many free market types supporting QE and subsidies.

Would you rather live in a world where there’s only 1 large firm because over regulation has created a high barrier to entry and little incentive to risk starting a competitor, or a world with many firms where it’s easy for people to compete and they’re incentivised to do so?

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

#112

Post by sjg007 »

Florin_Andrei wrote: post #27
FilterSweep wrote: post #9

Earlier quoted context omitted.

That’s effectively what Nick Hanauer has been saying more recently but I believe we are too far gone at this stage.

> I believe we are too far gone at this stage When irrationality and straight-up lying are so entrenched, you wonder what it would take to shake up the system. The only thing I see is some major catastrophe, like a meteor strike or something on that scale.

The pandemic should've been enough but... meh.

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

#113

Post by jacques_chester »

konfusinomicon wrote: post #24

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

This problem is called "the incidence of taxation" and it is well-studied. A great deal of debate about tradeoffs between various sorts of tax rest on how they distribute the incidence of taxation.

The larger point is: sometimes a tax increase gets passed on, sometimes it isn't.

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

#114

Post by profile53 »

dlp211 wrote: post #103
profile53 wrote: post #87

Earlier quoted context omitted.

I think that’s exactly what the parent commenter is saying, but I don’t think it is wrong to discuss per se. Consider 3 people: - Morgan. Worked 80 hour weeks for 40 years developing treatments for childhood cancer. Runs a charity supporting orphanages in their free time. Net worth: 8 million, income: 1 million - Sam. Started the largest pornography empire in the world and works as the CEO. Accused of child sex traff…

We are a nation of laws, not men. Everyone should be treated the same under the law. Every person in your example should pay the same amount of tax.

I mostly agree on that. How do you feel about current estate taxes, which, in effect, mean the third person has paid more tax than the first two?

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

#115

Post by jacques_chester »

RcouF1uZ4gsC wrote: post #80

> Julian Limberg, a co-author of the study and a lecturer in public policy at King's College London, said in an email to CBS MoneyWatch. "In fact, if we look back into history, the period with the highest taxes on the rich – the postwar period – was also a period with high economic growth and low unemployment." You can't really compare the present time to the post-war period, especially in the case of the United Stat…

The study looked at many countries, not just the USA.

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

#116

Post by t-writescode »

dlp211 wrote: post #77
t-writescode wrote: post #46

Earlier quoted context omitted.

Ignoring edge cases like selling a house, I would argue ‘fair share’ is for capital gains tax to have brackets that eventually equal regular income tax brackets, such that a CEO that makes $1 / year and 4 million in stocks, if he sells all 4 million in stocks 2 years later, isn’t paying only 15% income tax.

Your base point is valid, your example is at best incomplete. Stock compensation is taxed as regular income. The appreciation of the stock afterwards would be taxes as cap gains.

Yes, you're right. I admit I had completely forgotten about that.

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

#117

Post by durnygbur »

johndevor wrote: post #39
durnygbur wrote: post #32

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

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.

I disagree. The rich are interested in the premium segment of goods. The general public would have no benefit from Rolls Roys, Bugatti cars, from private luxury jets.

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

#118

Post by marcosdumay »

metiscus wrote: post #84
marcosdumay wrote: post #66

Earlier quoted context omitted.

Isn't the answer of this one known since the time of Keynes? That's basically what pulled the rich countries out of the Great Depression.

There is ongoing and significant debate about exactly that question. Here are some links from across the spectrum of opinion. https://www.nas.org/blogs/article/ask_a_scholar_did_the_new_... https://www.theatlantic.com/ideas/archive/2019/03/surprising... https://fee.org/articles/fdrs-folly-how-roosevelt-and-his-ne...

High taxation on wealth and high spending on the poor didn't start with the New Deal (the US lagged here) and didn't end with it.

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

#119

Post by grenoire »

durnygbur wrote: post #32

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

Well they gotta' trickle down something, it just has to be worth the investment to save more wealth! /s

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

#120

Post by AnthonyMouse »

wffurr wrote: post #82
AnthonyMouse wrote: post #59

> The study compared countries that passed tax cuts in a specific year, such as the U.S. in 1982 when President Ronald Reagan slashed taxes on the wealthy, with those that didn't, and then examined their economic outcomes. All of these studies consistently miss one thing. Effective tax rates haven't really changed since before Reagan. Prior to Reagan, the tax code was riddled with loopholes. Not like how it is now wh…

The actual paper where you can read their analysis for yourself: http://eprints.lse.ac.uk/107919/1/Hope_economic_consequences... That's a nice just-so story, but it's not supported by the evidence. You can read for yourself in the original paper, but the authors used a pretty sophisticated approach to measuring taxes: " We propose an encompassing approach that utilises Bayesian latent variable analysis on a range of…

> That's a nice just-so story, but it's not supported by the evidence.

Here is the evidence:

https://fred.stlouisfed.org/series/FYFRGDA188S

It is supported by the evidence.

> You can read for yourself in the original paper, but the authors used a pretty sophisticated approach to measuring taxes:

So sophisticated a model that it can measure the impact of a change in tax revenues that didn't meaningfully occur?

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