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

[JonLP24]

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.

https://www.cbsnews.com/amp/news/tax-cuts-rich-50-years-no-trickle-down/?__twitter_impression=true

One thing that has bothered me over the years is the media hasn't called out the Republicans for pushing discredited Hoover economics for years.

[BeyondGeography]

1. Small sample size

That’s only a little more than 80 percent of my life. Call me when it gets closer to 90-95.

[Roland99]

22. Yeah. And only 18 countries spread across the globe

Who are they trying to kid

[BlueJac]

2. It has been a bogus idea since Reagan!

[tclambert]

15. Will Rogers made fun of Herbert Hoover's attempt at trickle down economics . . . in 1932.

Will Rogers said: "The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickled down. Put it uphill and let it go and it will reach the dryest little spot. But he dident know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night anyhow. But it will at least have passed through the poor fellow’s hands."

[Srkdqltr]

3. We knew this at the time it started. Most folks knew what would trickle down

and it wasn't money

[RKP5637]

4. Most people paying attention knew it was a bunch of BS when Reagan started it. It was/is absolutely

stupid.

[chriscan64]

12. Even among Reagan's staff, not all were true believers.

The core of it was "the right to get rich and keep the money." Ronnie himself may have been fooled, or maybe was a better actor after leaving Hollywood.

[William Seger]

18. It's stupid, and only the stupidest Republicans believed it would work

Never forget that the ones who aren't stupid knew exactly what they were doing.

[RKP5637]

28. Yep!!! Certainly not by accident! n/t

[brush]

5. Trickle down has never worked. The most recent try was Brownback's disastrous...

reign as republican governor of Kansas. The state lost so much revenue that finally cancel his "experiment". And the state was glad to get rid of him and it.

[misanthrope]

6. This might not be an axiom, but it's certainly a principle

"Money defies gravity." It naturally flows upward. The last 50 years are a vivid illustration of it.

Critics decry taxes as "wealth distribution," as if there's something wrong with any sort of taxation. Yet we've seen that a progressive tax system wherein the vast wealth at the tip of our economic pyramid is pumped back into the base, into projects that enable the system that has made those fortunes possible. Assistance for the least among them provides social stability and lifts the vast weight of the nation from its foundation.

And the "redistribution" doesn't really matter. Those funds will always seek to creep uphill, back to those who condemned its temporary reallocation.

[catrose]

8. As Will Rogers observed, whatever's in a poor man's pocket will be in the rich man's by nightfall.

[tclambert]

16. Money bubbles upward.

[catrose]

7. Who'da thunk? Except anyone who ever took one semester of economics?

[SWBTATTReg]

9. And they are now just figuring this out? Someone should tell Congress and others that make the

laws of income distribution (in whatever manner they chose) to perhaps pay more attention to the 95% of us that haven't gathered the fruits of such failed policies.

[smirkymonkey]

10. +1000

Is this a surprise to anyone with half a brain?

[AZ8theist]

11. In other news, water is wet.

Film at 11.

This was an idiotic economic idea when first proposed. Why is anyone surprised it was a scam??

[Mr.Bill]

13. I have an idea,

instead of giving money to big business and see if it trickles down, lets give money to their customers and see if it trickles up. We get to try it for 40 years, just like they did.

[Nitram]

14. Well......duh!

[czarjak]

17. "Faith-based agencies will fill the void" (Since they're all flush with cash$$$$$)

[jaxexpat]

19. And not only that.

The removal of tax income from the treasury has left the country less able to respond to an economy ever more reliant on high-tech for profitability. Education initiatives, well, initiatives of almost any kind, have not risen to meet the challenge for many to participate in the fortune of the nation. Consequently, low end, dead end, jobs proliferate, shackling talent needed and now no longer available to sustain the middle class. Over three generations have been squandered, overused without care or repair, much like our infrastructure and our military. The fruit of this is a disparagement of effort-to-reward unanticipated by those who ineffectually and self-righteously rue the loss of their precious universal work ethic. Homelessness and the threat of homelessness, impotent violence and+ rage, a society addicted to its preoccupation with media is the current state. THAT, unless brought into check, is the end.

[malaise]

20. Both parties are guilty of pushing these bound to fail neo-liberal policies

Had Bretton-Woods folks listened more to Keynes than US bankers, Reagan and Thatcher would not have been able to fuck up the planet so royally.

[JonLP24]

21. I agree

I favor Keynesian economics. That was when the US & other countries economies were at their best. There were also less monopolies as well.

[malaise]

23. The Friedman/Hayek bullshit has failed big time

First they looted the developing countries and now they're looting their own people more than usual.
No health care, no education but lots of money for law and order and wars while the billionaires and their corporations steal everything for themselves.

Hopefully this pandemic will wake up the planet.

[Tommymac]

24. The only thing that trickles down from the 1% is the liquid shit out of their adult diapers.

But the Rethuglican Sheep love it.

[Dr. T]

25. Trickle up poverty

is going to bite these bastards in the ass. The French aristocracy didn't see it coming either.

[4Q2u2]

26. Even in the 80's and on

Top Republicans knew that "Trickle Down" was BS.

"Trickle Down" economics was a "Trojan Horse" David Stockton Reagan Economic advisor.

http://www.rationalrevolution.net/war/trickle_down.htm

While running against Ronald Reagan for the Presidential nomination in 1980, George H. W. Bush had derided the trickle-down approach as "voodoo economics".[27]
In the 1992 presidential election, independent candidate Ross Perot also referred to trickle-down economics "political voodoo"

[Fortinbras Armstrong]

27. I quote from Pope Francis' Apostolic Exhortation, Evangelii Gaudium -- "The Joy of the Gospel"

In which he describes trickle-down economics, "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.