Difference between revisions of "Trickle down theory"
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(falsely attributed to Ronald Reagan) |
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Many people called President [[Ronald Reagan]] a proponent of trickle down economics after he advocated cutting the [[capital gains]] tax rate, but | Many people called President [[Ronald Reagan]] a proponent of trickle down economics after he advocated cutting the [[capital gains]] tax rate, but | ||
| − | :He did not sell this policy on the grounds that ‘there will be a trickle down effect.’ However, opponents often claimed that this miserable ‘trickle down effect’ summarised Reagan’s economic policy<ref name=reagan> | + | :He did not sell this policy on the grounds that ‘there will be a trickle down effect.’ However, opponents often claimed that this miserable ‘trickle down effect’ summarised Reagan’s economic policy<ref name=reagan /> |
Actually, as economist [[Thomas Sowell]] points out, | Actually, as economist [[Thomas Sowell]] points out, | ||
Revision as of 13:56, December 5, 2016
Trickle down theory is the idea - falsely attributed to conservatives - that helping rich people will indirectly help the poor.
- ... if high income earners gain an increase in salary, then everyone in the economy will benefit as their increased income and wealth filter through to all sections in society.[1]
the theory that cutting taxes for the corporations and wealthy individuals will stimulate economic growth by increasing the amount of capital available to invest. Some argue that cutting taxes to the poor has a greater effect on the economy since almost all the money that they earn goes directly to buying products and services.
Many people called President Ronald Reagan a proponent of trickle down economics after he advocated cutting the capital gains tax rate, but
- He did not sell this policy on the grounds that ‘there will be a trickle down effect.’ However, opponents often claimed that this miserable ‘trickle down effect’ summarised Reagan’s economic policy[1]
Actually, as economist Thomas Sowell points out,
- there is no such thing as "trickle-down" economics. Supposedly those who believe in trickle-down economics want to give benefits to the rich, on the assumption that these benefits will trickle down to the poor.
- no economist of the past two centuries had any such theory.[2]