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

[tenderfoot]

Many knew this 40 years ago...

Tax cuts for the wealthy have long drawn support from conservative lawmakers and economists who argue that such measures will "trickle down" and eventually boost jobs and incomes for everyone else. But a new study from the London School of Economics says 50 years of such tax cuts have only helped one group — the rich.

The new paper, by David Hope of the London School of Economics and Julian Limberg of King's College London, examines 18 developed countries — from Australia to the United States — over a 50-year period from 1965 to 2015. 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.

Per capita gross domestic product and unemployment rates were nearly identical after five years in countries that slashed taxes on the rich and in those that didn't, the study found.

But the analysis discovered one major change: The incomes of the rich grew much faster in countries where tax rates were lowered. Instead of trickling down to the middle class, tax cuts for the rich may not accomplish much more than help the rich keep more of their riches and exacerbate income inequality, the research indicates.

"Based on our research, we would argue that the economic rationale for keeping taxes on the rich low is weak," 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."


https://www.cbsnews.com/news/tax-cuts-rich-50-years-no-trickle-down/?ftag=CNM-00-10aab7e&linkId=107376948

[iemitsu]

1. Duh.

[Beartracks]

2. As we build back better, listening to scientists is important, and that includes economists.

[intrepidity]

3. Shocking!!

(not)

[TlalocW]

4. GASP!

An economic system based on a graph that made no mathematical sense, scribbled on a cocktail napkin in a bar in the 70s, championed by a former football player and a dementia-riddled president, shunned by the majority of serious economists, and whose effects democratic presidents always have to deal with when they take office IS NOT a panacea for whatever ails ya?

Mind. Blown.

TlalocW

[Phoenix61]

11. + 1,000 nt

[sprinkleeninow]

5. An analcyst discovers that trickle down favored rich making them richer

no kidding sherlock

IOW, pi$$ on y'all underneath....

[PlanetBev]

6. I'm shocked, shocked, I tell you...

That trickle-down economics is the biggest con ever perpetrated on the American people. There’s a reason I couldn’t sleep for two weeks after Ronnie Raygun was elected.

The only thing that rolls downhill is shit.

[kurtcagle]

7. It's actually why with the 2018 tax cuts

Congress didn't even try to disguise that it was a tax holiday for the wealthy.

The problem that most Americans have is that they are sold on the concept that they are, one and all, temporarily disadvantaged millionaires. No one wants to reduce taxes on the wealthy if they believe that they'll be wealthy one of these days. When I go to the gym, they usually have TVs set to home improvement shows, with the premise generally being that the suddenly wealthy couples (either through lotteries or other happy accident) get to showcase the construction of the home of their dreams by the hosts. This has been so successfully sold to the American public that few actually look beyond the facade, at how few people actually get to the point where they'd benefit long term from these tax cuts.

[Fortinbras Armstrong]

8. Pope Francis summed it up well

I quote from his Apostolic Exhortation, Evangelii Gaudium, in which he says, "The promise was that when the glass was full, it would overflow, benefitting the poor. But what happens instead, is that when the glass is full, it magically gets bigger, nothing ever comes out for the poor."

He also wrote,

Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacra­lised workings of the prevailing economic system. Meanwhile, the excluded are still waiting.

[Sophiegirl]

10. Greed is insatiable. nt

[Canoe52]

9. I remember watching president bonzo explain trickle down on the tv.

Couldn’t believe Americans could fall for that bs.
Now I believe they could fall for anything, no matter how idiotic.

[Captain Zero]

12. And the rich used their windfall gains to capture

Our entire political system from the school boards, county governments, and state legislatures to the White House. It's why we need to have an amendment to override the misnamed Citizens United Supreme Court decision.

[ProfessorPlum]

13. From the Journal of No Shit

[ProfessorPlum]

14. "Voodoo Economics" is what GHW Bush called when he was running against Reagan

in the GOP primary. It's one of his most important additions to our lexicon, not that he didn't climb right on board the bandwagon once this fraud got rolling.