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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

#51

Post by NiceWayToDoIT »

11thEarlOfMar wrote: post #36

This 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 Illinoi…

In UK/US (probably many other countries) issue is that those that many who are even wealthier for similar kind of income pay less taxes than nurses on $30,000 a year, because they know how to hide income in number of tax loopholes made just for them. On top of that government gives them not just tax reliefs, but additional cash so they can invest and on top of that banks give them much better terms for credit...

[1] https://www.independent.co.uk/news/uk/politics/blair-s-compa...

[2] https://www.bloombergquint.com/politics/trump-returns-show-h...

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

#52

Post by rbanffy »

zthrowaway wrote: post #38

This 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.

Politicians who use it to justify self-serving policies are not well reputed economists, but still define fiscal policies based on flawed economic ideas.

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

#53

Post by Diederich »

mikestew wrote: post #4

Perhaps 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.

George Bush, Sr., characterized Reagan's economic paradigm (Reagonomics/supply side/trickle down/etc) as "Voodoo economics": http://news.bbc.co.uk/2/hi/americas/270292.stm https://www.youtube.com/watch?v=o8hnM6xNjeU

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

#54

Post by bearjaws »

standardUser wrote: post #35
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?

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.

Good point.

The teaching of supply vs demand vs cost of production has really let our society down recently.

Very few people seem to be aware that non-essential items are priced based upon what people are WILLING to pay for it, not what it costs to produce.

This results in comments like "well the price for XYZ will just go up!", when in reality its much more complicated.

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

#55

Post by exabrial »

That's because the problem is Taxation, not tax cuts, not the rich.

If the USA Government was on Charity Navigator, it'd have a 0 star rating for overhead and delivery. I'm 100% for gutting taxes until we measure results with what we spend. Every business measures their spend for efficiency and every financially savvy person also calculates the rate of return. Why we willy-nilly throw gazillions of dollars at the government to watch it being funneled into your Senator's Buddy's pocket is beyond me.

If we're going to tax, the first step should be how to we measure the results.

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

#56

Post by adamredwoods »

eloff wrote: post #17

I'm really curious how many of our democracies fail in this specific case. There aren't a lot of wealthy people, so if politicians are pandering to the majority, this is the wrong call. It's well known not to work for a long time, so logically it's also the wrong call. Are most politicians wealthy? Is that why they seem to overly protect the interests of this group over the rest of the population? Straight up self-in…

I have an arm-chair theory that pure capitalism eventually evolves into plutocracy. Some cultures/countries define a high monetary value as success, so humans naturally look to success as characteristic for leaders.

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

#57

Post by mdorazio »

redisman wrote: post #34
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.

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 luxu…

I think you inadvertently pointed out the whole problem. The US government will hand out checks in emergencies, funded by debt, but won't actually increase taxes on top brackets in a meaningful way. So you end up with wealth redistribution being a non-starter.

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

#58

Post by brmgb »

11thEarlOfMar wrote: post #36

This 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 Illinoi…

That's more than thirty times the average US salary so at least thirty times the average amount of taxes paid by a person - a bit more would still be fair as utility of money decreases quickly past a certain point - and different taxes on the stock benefits and capital gains.

The amount of hours someone works is completely irrelevant. Paying taxes is not about whether you deserve the money nor is it a punishment. It's entierely about how much you can contribute.

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

#59

Post by AnthonyMouse »

> 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 where corporations do this and that, but much worse. Rich individuals were just deducting everything they buy from their taxes.

The Reagan "tax cuts" did two things. One, they closed a lot of those loopholes. Two, they significantly lowered nominal rates. The two things basically canceled out. There was never any meaningful reduction in government revenue.

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

#60

Post by kmlevitt »

11thEarlOfMar wrote: post #36

This 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 Illinoi…

To answer that, let’s look at what his rate would have been during America’s greatest expansion of prosperity, when possibly more people of humble means were pulling themselves up from their bootstraps than at any other point in history. Let’s go with say 1960 and adjust for inflation.

https://web.stanford.edu/class/polisci120a/immigration/Feder...

1,500,000 in 1960 dollars is about 180,000. Which means his maximum tax rate would have been 87%

My guess is that number will shock and outrage people. Even I think that’s too high. But the point is history already shows us that all those arguments that that rate wouldn’t result i. The destruction of incentives for Americans to work harder, or lower overall quality of life. For example that tax revenue could pay for funding college so that people don’t have to take on crushing debt just to go.

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