Yves here. Even though there is a considerable body of academic research disputing a pet idea of the wealthy, that they should be first in line to get tax breaks because economy, the barmy trickle down theory still gets so much lip service that it needs to be assailed regularly. A short form response to defenders is that the premise of trickle down is that giving the rich more money will lead to more productive investment. In fact, big corporations themselves have more money than they know what to do with, witness them buying stock back rather than reinvesting. Similarly, private equity firms collectively are sitting on hundreds of billions of “dry powder,” as in undeployed investor commitments, and it’s been that way for many years. The world does not need more investment dollars. It needs higher ordinary worker incomes and/or a transition to a low/no growth economy to reduce pressure on the biosphere.
By Kenny Stancil, staff writer at Common Dreams. Originally published at Common Dreams
Neoliberal gospel says that cutting taxes on the wealthy will eventually benefit everyone by boosting economic growth and reducing unemployment, but a new analysis of fiscal policies in 18 countries over the last 50 years reveals that progressive critics of “trickle down” theory have been right all along: supply-side economics fuels inequality, and the real beneficiaries of the right-wing approach to taxation are the super-rich.
The Economic Consequences of Major Tax Cuts for the Rich (pdf), a working paper published this month by the International Inequalities Institute at the London School of Economics and written by LSE’s David Hope and Julian Limberg of King’s College London, examines data from nearly 20 OECD countries, including the U.K. and the U.S., and finds that the past five decades have been characterized by “falling taxes on the rich in the advanced economies,” with “major tax cuts… particularly clustered in the late 1980s.”
But, according to Hope and Limberg, the vast majority of the populations in those countries have little to show for it, as the benefits of slashing taxes on the wealthy are concentrated among a handful of super-rich individuals—not widely shared across society in the form of improved job creation or prosperity, as “trickle down” theorists alleged would happen.
“Our research shows that the economic case for keeping taxes on the rich low is weak,” Hope said Wednesday. “Major tax cuts for the rich since the 1980s have increased income inequality, with all the problems that brings, without any offsetting gains in economic performance.”
No surprise that this argument by lobbyists for the rich proves bogus.
Reduce taxes on rich and you get richer rich, not stronger growth. https://t.co/UXILu5O5wW
— Sheldon Whitehouse (@SenWhitehouse) December 16, 2020
(paper) David Hope, LSE and Julian Limberg, King’s College London: #tax cuts for rich people breed #inequality without providing much of a boon to anyone else @economics https://t.co/dQfv1cW1Id pic.twitter.com/BqI9hmP9CN
— ACEMAXX ANALYTICS (@acemaxx) December 16, 2020
In their study, the pair of political economists note that “economic performance, as measured by real GDP per capita and the unemployment rate, is not significantly affected by major tax cuts for the rich.” However, they add, “major tax cuts for the rich increase the top 1% share of pre-tax national income in the years following the reform” by a magnitude of nearly 1%.
The researchers continue:
Our findings on the effects of growth and unemployment provide evidence against supply-side theories that suggest lower taxes on the rich will induce labour supply responses from high-income individuals (more hours of work, more effort etc.) that boost economic activity. They are, in fact, more in line with recent empirical research showing that income tax holidays and windfall gains do not lead individuals to significantly alter the amount they work.
Our results have important implications for current debates around the economic consequences of taxing the rich, as they provide causal evidence that supports the growing pool of evidence from correlational studies that cutting taxes on the rich increases top income shares, but has little effect on economic performance.
Limberg is hopeful that the research could bolster the case for increasing taxes on the wealthy to fund a just recovery from the coronavirus pandemic and ensuing economic fallout.
“Our results,” he said Wednesday, “might be welcome news for governments as they seek to repair the public finances after the Covid-19 crisis, as they imply that they should not be unduly concerned about the economic consequences of higher taxes on the rich.”
Progressives have argued that America’s disastrous handling of the ongoing catastrophe is attributable to several decades of “free-market” ideology and associated policies that exacerbated vulnerabilities and undermined the government’s capacity to respond effectively.
Perhaps the fact that billionaire wealth is exploding while breadlines form across the nation is an indicator that trickle-down economics is a sham?
— Robert Reich (@RBReich) December 11, 2020
According to social justice advocates, taxing billionaires’ surging wealth—akin to the “Millionaire’s Tax” passed earlier this month in Argentina—could contribute to reversing the trend of intensifying inequality plaguing the nation.
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Well, our new Pres is most concerned about our souls for his first 100 days. Am sure he’ll get around to reversing Bush 2’s tax cuts, Obama’s doubling down, Trump’s extra special super tax cuts(‘the greatest ever’ of course), and all the other Neo Lib bs foisted upon us these last 50. But getting us to heaven comes first.
Anyone who goes to heaven for certain does not need reversal of tax cuts. Heaven has no taxes. At least I hope so.
No doubt Heaven will have some way of elevating some people over others. There will be a whole lot of ‘holier than thous’ or people who think that they are ‘more deserving’ who will be incredibly unhappy if it doesn’t.
Oh the medieval church was well ahead of you. The standard hierarchy (see Aquinas) had nine orders of angels, each one step further away from the divine presence:
Seraphim, Cherubim, and Thrones; Dominions, Virtues, and Powers; Principalities, Archangels, and Angels.
Not sure how proximity to God affected your tax status. It can’t have done it any harm, I’d have thought?
I never want to meet an archangel. There’s small chance of that, but still… never. They seem to be functionally insane.
“It is easier for a camel to thread the eye of a needle than for a rich man to enter the gates of Heaven.” And then there’s the Joe Hill song, “Pie in the Sky”. Sung here by the immortal Utah Phillips.
https://www.youtube.com/watch?v=PJ236CwhlPw
There’s nothing “neo-liberal” about trickle-down theory. There are lots of thing wrong woth neo-liberal theory, but this economic fraud is not one of them. Writers should know their political throry before throwing its terms around as epithets.
Wow, has Milton F been resurrected? And it seems lying in dirt for 20 years has made him quite sensitive.
There is no Neo-Lib ‘theory’, only the reality on the ground. The free-for-all we got ours, you choke on it, and if possible go die.
Now what your supply-side novels teach you in the tiny nooks of Univ of Chicago library is entirely up to you.
What’s gone wrong?
Where does it always go wrong?
“The Fate Of Empires and Search For Survival” Sir John Glubb
http://www.rexresearch.com/glubb/glubb-empire.pdf
The pivot point where the decline begins.
“There does not appear to be any doubt that money is the agent which causes the decline of this strong, brave and self-confident people. The decline in courage, enterprise and a sense of duty is, however, gradual.
………..
All these periods reveal the same characteristics. The immense wealth accumulated in the nation dazzles the onlookers. Enough of the ancient virtues of courage, energy and patriotism survive to enable the state successfully to defend its frontiers. But, beneath the surface, greed for money is gradually replacing duty and public service. Indeed the change might be summarised as being from service to selfishness.”
“But, beneath the surface, greed for money is gradually replacing duty and public service. Indeed the change might be summarised as being from service to selfishness.”
That sounds like the ideology we call “neoliberalism”.
It is always in the interests of the wealthy to convince everyone that real wealth lies in money.
When they have succeeded in doing that, it’s the beginning of the end.
Don’t get confused between making money and creating wealth.
When you equate making money with creating wealth, people try and make money in the easiest way possible, which doesn’t actually create any wealth.
In 1984, for the first time in American history, “unearned” income exceeded “earned” income.
The American have lost sight of what real wealth creation is, and are just focussed on making money.
You might as well do that in the easiest way possible.
It looks like a parasitic rentier capitalism because that is what it is.
You’ve just got to sniff out the easy money.
All that hard work involved in setting up a company yourself, and building it up.
Why bother?
Asset strip firms other people have built up, that’s easy money.
The private equity firms have found an easy way to make money that doesn’t actually create any wealth.
Bankers make the most money when they are driving your economy into a financial crisis.
They will load your economy up with their debt products until you get a financial crisis.
On a BBC documentary, comparing 1929 to 2008, it said the last time US bankers made as much money as they did before 2008 was in the 1920s.
https://www.youtube.com/watch?v=vAStZJCKmbU&list=PLmtuEaMvhDZZQLxg24CAiFgZYldtoCR-R&index=6
At 18 mins.
The bankers loaded the US economy up with their debt products until they got financial crises in 1929 and 2008.
As you head towards the financial crisis, the economy booms due to the money creation of bank loans.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
The financial crisis appears to come out of a clear blue sky when you use an economics that doesn’t consider debt, like neoclassical economics.
Bankers make the most money when they are driving your economy into a financial crisis.
At 25.30 mins you can see the super imposed private debt-to-GDP ratios.
https://www.youtube.com/watch?v=vAStZJCKmbU&list=PLmtuEaMvhDZZQLxg24CAiFgZYldtoCR-R&index=6
The bankers will load your economy up with their debt products until you get a financial crisis.
1929 – US
1991 – Japan
2008 – US, UK and Euro-zone
The PBoC saw the Chinese Minsky Moment coming and you can too by looking at the chart above.
They were lucky; they only saw it coming at the last minute.
Banks – What is the idea?
The idea is that banks lend into business and industry to increase the productive capacity of the economy.
Business and industry don’t have to wait until they have the money to expand. They can borrow the money and use it to expand today, and then pay that money back in the future.
The economy can then grow more rapidly than it would without banks.
Debt grows with GDP and there are no problems.
The banks create money and use it to create real wealth.
We want economic success
Step one – Identify where wealth creation occurs in the economy.
Houston, we have a problem.
Economists do identify where real wealth creation in the economy occurs, but this is a most inconvenient truth as it reveals many at the top don’t actually create any wealth.
This is the problem.
Much of their money comes from wealth extraction rather than wealth creation, and they need to get everyone thoroughly confused so we don’t realise what they are really up to.
The Classical Economists had a quick look around and noticed the aristocracy were maintained in luxury and leisure by the hard work of everyone else.
They haven’t done anything economically productive for centuries, they couldn’t miss it.
The Classical economist, Adam Smith:
“The labour and time of the poor is in civilised countries sacrificed to the maintaining of the rich in ease and luxury. The Landlord is maintained in idleness and luxury by the labour of his tenants. The moneyed man is supported by his extractions from the industrious merchant and the needy who are obliged to support him in ease by a return for the use of his money.”
There was no benefits system in those days, and if those at the bottom didn’t work they died.
They had to earn money to live.
Ricardo was an expert on the small state, unregulated capitalism he observed in the world around him. He was part of the new capitalist class, and the old landowning class were a huge problem with their rents that had to be paid both directly and through wages.
“The interest of the landlords is always opposed to the interest of every other class in the community” Ricardo 1815 / Classical Economist.
They soon identified the constructive “earned” income and the parasitic “unearned” income.
This disappeared in neoclassical economics.
GDP was invented after they used neoclassical economics last time.
In the 1920s, the economy roared, the stock market soared and nearly everyone had been making lots of money.
In the 1930s, they were wondering what the hell had just happened as everything had appeared to be going so well in the 1920s and then it all just fell apart.
They needed a better measure to see what was really going on in the economy and came up with GDP.
In the 1930s, they pondered over where all that wealth had gone to in 1929 and realised inflating asset prices doesn’t create real wealth, they came up with the GDP measure to track real wealth creation in the economy.
The transfer of existing assets, like stocks and real estate, doesn’t create real wealth and therefore does not add to GDP. The real wealth creation in the economy is measured by GDP.
Real wealth creation involves real work producing new goods and services.
So all that transferring existing financial assets around doesn’t create wealth?
No it doesn’t, and now you are ready to start thinking about what is really going on there.
Economists do identify where real wealth creation in the economy occurs, but this is a most inconvenient truth as it reveals many at the top don’t actually create any wealth.
Hide what real wealth creation is, and pretend it’s making money, and this problem goes away, but your economy will suffer.
Help! I can’t find that lovely Adam Smith quote in http://www.econlib.org.
Just Google the first line.
I checked it before.
Thanks! From Mike Perelman, no less.
it’s a testament to the Mindf&ck, which has coexisted from the beginning in present form with Supply Side, Piss on My Head Economic orthodoxy, that we need yet another Study to tell us what should have been perfectly obvious.
GOP has their Supply Side, “Job creator” mythology…Corpsedems have pete peterson and Paygo.
the rest of us are left with the Mythology of Bootstraps, and Just World Theory…wherein if you can’t make it, you must be a Sinner, and Deserve your Poverty…Deus Volt!
That I’ve heard this rot from even poor white trash on foodstamps…for 35 years!….is a remarkable achievement.
Eat the Rich, before they eat you.
Great post. Good links.
imo, Excessive consumption is the Model driving the Climate Crises and Wealth Inequality.
Attacking the Climate Crises is a frontal attacking on excess Consumption, which in turn threatens the order of the Wealth Creation scheme our Economy is predicated on.
The conflation of making money and generating wealth is an enabler to the scheme.
The banks create money and use it to create real wealth. SoS
The banks, in essence because of government privilege, extend the PUBLIC’S credit but for the private gain of the banks themselves and the so-called “credit worthy”.
While this system may CREATE wealth, it obviously doesn’t distribute it justly and thus may end up destroying wealth via depressions and war.
Besides, inexpensive fiat renders the current Gold Standard banking model obsolete. Why then do you persist in defending it?
All you need to do is say the magic words “Job Creators.” Slogans like this one make those who would normally, if they were pursuing their own class interest, reject attempts to cut taxes for the wealthy accept the logic, faulty as the facts demonstrate.
A sham that is not only used to cut taxes on the richest but also to justify globalization in the terms that these very same powerful demand through all those damned Trans Oceanic Partnership Agreements. I would like to see a similar study explaining why these tickle down economics at corporate and international level has resulted in the explosion of migratory forces around the world instead of real development.
Migrations happen not only cause of there is pressure, also mainly because there is cheap travel.
Before trickle down there was literal starving to death in sub-saharan africa but much less migration than today
Nowadays it’s easier to travel explicitly because of globalization and there is a reasonable belief you can stay there in the foreign country, be it Europe or North America.
Those two factors: easy travel and a destination you know is suitable are the main drivers. Not trickle down.
Trickle down pretty much only hurts the rich states where it originated by making the rich richer and poor poorer there. In the 3rd world there actually is a trickle down effect: fabs that paid $10 per hour in the 1st world get relocated and pay $2 per hour in the 3rd world, still more what they could get before: it trickles down, “trickle” being the important word, from 10 to 2 that’s a real trickle.
Cheap travelling? Think twice. Intl. Treaties and Agreements have been made with the only purpose to give rights to companies to exploit resources and grab vast amounts of land in Sub Saharan and other countries. Such agreements disrupt very much rural societies and result in massive migrations.
Thank you. And I think discounted flights are how/why the Libyans, the Syrians. Iraqi’s. Afgans, Central America ns st el mass ‘migrated’.
I thought it was the double miles…
Using Bezos as an example is misguided. His Amazon salary is around $80K per year, no moar than a petty government functionary and total compensation is $1.7 million when “benefits” are included. A peasant, compared to the phuckers of Wall Street. The mediagasm of Bezos being the richest man in the world based on the delusion that Amazon’s stawk price reflects reality is no moar than click bait.
When you get into the weeds of tax law, a change that occurred about two decades ago is having unintended consequences. Carry forward losses never expire (in Canada they expire after twenty years, which was changed from seven years around the year 2006) and this change is causing massive distortions, such as the annual money losing abortion known as Uber being able to wade into the taxi business and put everyone else out of business by deliberately pricing the product at roughly half the cost, with the latest distortion being California prop 22, where the money losing gig apps added another $200 million to their carry forward losses, collectively, to buy law that entrenches their “business” model.
Were there a time limit of let’s say for example ten years and those losses expired, would even the dumbest money on the planet have sunk a buck into a perenial loser like Uber? That profitless companies can be listed on the stawk market amplifies the distortion.
Uber will never pay income tax, after accumulating somewhere around $30 billion in carry forward losses.
Moar? Phucking? Stawk? This style of spelling is extremely annoying.
It’s a tradition from the early days, a rather vociferous english commenter if I remember correctly is to blame
my favorite, which I use when I can is jawbs . . .
+10
Cover your eyes, you are not gonna like this word. Groaf, a derisive misspelling of eclownomist’s mantra of infinite growth.
Interesting tax provision, cnchal. Thanks. Digressing a bit from the subject of this excellent post, I wonder if tax loss carry forwards would survive a “well structured merger” with a hypothetical holding company or private equity firm that has businesses with taxable income that can be offset by tax loss carry forwards? Is it possible that a company might never need to earn taxable income, but only needs to generate large tax losses to be of significant value to a prospective “merger partner”? Obviously not a tax accountant, just feel some of the complex legal and tax structures that have been created, such as you described here, are broadly counterproductive.
When GM went through bankruptcy, carry forward losses were considered an asset because there was potential for a company with a tax liability to reduce or eliminate it when buying the division that had the losses.
Every year Uber sinks the rough equivalent of a Nimitz unit, but it doesn’t just drift to the bottom of the ocean, it drifts to the balance sheet. The money is gone, the accounting entry remains, ready to offset taxable profits from here to eternity. The taxable profits don’t have to come from Uber either.
What was the point of Uber? Starts off as an illegal taxi service and morphs into a labor law setting entity with CA prop 22, bankrolled by foreign entities, the Saudis and Softbank. We can also see where this is heading, what with the vice president elect’s relative burrowed into Uber as their legal representative, chowing down on millions while billions get added to the losses. Is this progress?
gig worker = you are your own means of production
50 years, eh? Take a gander at this webpage.
https://wtfhappenedin1971.com/
This idea is really a** backwards this. The idea of trickle down is like a servant bringing a banquet to their master and then waiting under his table for a few crumbs or a gnawed bone to fall to the ground. Stuff does not trickle down, it trickles out. And by that I mean places like the Caymans where it is out of the touch of the taxman. Virtually all excess money is captured and diverted elsewhere and that is a fact. Nobody really knows how much the wealthy are worth as that information is beyond reach in some Treasure Island somewhere so everybody else has to pay more taxes to make up the difference.
So when I said that this whole idea was a** backwards, what I meant was this. Have those tax cuts go to the little guy who will then spend it into the economy. This creates employment for other people as demand goes up and if the rich are patient, it will nearly all trickle upwards to their bank accounts sooner or later. In a way, that was what happened in post-war America where wages were good for most people, the economy was booming, and a variety of business people were becoming rich as all that money sloshing around came their way (think Colonel Sanders).
If we had a somewhat more rational defense policy, we’d be bombing the Caymans and other treasure islands rather than the likes of Afghanistan and Libya. But then we’d also have to bomb Delaware and South Dakota.
Will Rogers had it figured out in the ’30s, and didn’t need a fancy study to do so.
https://i1.wp.com/wiredpen.com/wp-content/uploads/2015/01/will-rogers-pix.png
My fave Adam Smith quote is
“All for ourselves, and nothing for Other People, has in every age of the world been the vile maxim of the masters of mankind.”
FDR put our plutocrats in a box. Reagan let them out, and once again, they own the place.
Was it Smith who stated that the Invisible Hand is busy stacking the deck?
Smith was a Shakespearean actor, a good one apparently. The invisible hand was actually a term of derision, in Shakespeare, it’s a conjurer’s trick. So it wasn’t a term of approbation. Smith was uncomfortable with the mechanism even though it worked.
i found both of Smith’s main works at a library sale, for $2 each.
i don’t think “Wealth…” should be read without also reading “Moral Sentiments”…and i really wish the free market uber alles crowd would read the rest of “Wealth…”,or even just the rest of the paragraph containing the “Invisible Hand” analogy.
I read somewhere that Smith himself was disappointed that “Wealth..” was the one everybody went gaga over, as he considered “Moral Sentiments” to be his best, most important work.
He thought of himself as a Moral Philosopher, not an “economist” with delusions of “economy=physics”.
(also, I found Smith’s writing style on par with his contemporary Gibbon (decline and fall), filled with laugh out loud biting wit…although not as hilarious as some of Marx’ stuff(like “Eighteenth Brumaire of Louis Napoleon”))
I’m recycling something I wrote yesterday, it may seem reductive, but after 30 years caring about this stuff, this is where I am:
It took the pandemic for me to finally understand why all the finance and security valuation courses I took had no place in the real world.
It’s because of the printing. We thought there was some miracle or new paradigm, but it’s just the constant debasement of the dollar, which I suppose was the new paradigm.
It makes stocks “go up,” but only because it takes more dollars to buy a share. Whatever labor costs haven’t been hollowed out by the internet are offshored or automated, which keeps CPI increases moderate, while asset price inflation is 1:1ish.
And the corporate world bestows generous stock-based comp precisely because of this natural “bid” created by the printing. [Add in nonsense like issuing billions in debt just to fund these programs, and it becomes clear corporations are merely wealth transfer mechanisms]
Which is a long way to go to say if we don’t stop bailing out the C-Suite this country will be over soon.
Yes.. you figured it out. The Feds official.policy is asset inflation and wage suppression.
My eyesight is failing. Surely a consequence of reading too many words belaboring the obvious. Robert Reich again…was he opining from his warm and sunny shingle-style in Newton? Decades of sanctimonious blather from him and I am in need of a new bifocals. So, I click on Common Dreams and get a PO Box in the latest bougie second dwelling getaway, Portland, Maine…home of the infinitely malleable Sara Gideon. Herself with $14M left in the till from her epic fail against Susan Collins, a woman who projects herself as the voice of reason and votes with the old white guy reactionary golfers every time. However, there is always something to learn from a a woman who has spent a couple of decades negotiating the surface slime and projects as a sober moderate. And who has learned this lesson better than Sheldon Whitehouse? He has even written a weighty tome on the Corporate Infiltration of America. You would think that he would be right out front on Move to Amend…nah! He has nice hair though. When does hockey season start?
NCHC just finished up their POD… a two week round robin hosted in Omaha, NE.
Terrific college hockey with U ND, U MD, DU, CC, Western Michigan, Miami, Omaha St Cloud State
Perhaps the ‘rona will flare up again post New Year and they will be forced back into an ‘intensive’ pod round robin format again.
Great Hockey… 22 year old freshmen from BC, AB, SK, MB, and the northern tier of the OOSA
They’re talking January for NHL.
But when does the WJC start?
As a good NC reader, we still need to sigh at the part that starts here:
Limberg is hopeful that the research could bolster the case for increasing taxes on the wealthy to fund a just recovery from the coronavirus pandemic and ensuing economic fallout.
We need to increase taxes on the wealthy for the same reason a horse would need to take the whip from an intolerant master. But the whip itself is useless to the horse, it doesn’t need it for anything itself.
We can “fund” a just recovery all by ourselves, thank you.
Yeah, this “taxes to fund things” is the equivalent of attacking the Maginot Line.
Just go around the damned thing and demonstrate once and for all that we don’t need rich people for anything, really.
The purpose of taxing them is to minimize the damage that plutocracy otherwise does to our democracies.
True this ADC and eg.
taking the high road is a choice
Seems always with baggage
And always simpler said
My elders explained
“It always turns out better that way”
Taxes destroy “money” or puts an entry in an accounting ledger.
Congress, banks and the fed create “money” issued as the global reserve currency. Even if one could destroy “money” via taxes for the privileged classes, how do you prevent said class from simply creating more “money” for themselves or even another type of accounting entry to take its place while claiming that they were in fact paying their fair share of taxes. i.e., what is the actual outcome we think we want and what criteria will we use to judge our progress toward that goal?
If one was able to “tax” billionaires in the US out of existence, what are we planning to do about all the other billionaires we helped to create around the world who learned how to utilize our “accounting” system?
If taxing is part of the solution in our current reality, as a first round question I’d ask: How much “money” would we need to take out of global economy to reach some type of level playing field? Or to go the other route, how much “money” would need to be created to level the playing field and who would we hand it to? Is it even possible to level the playing field?
The real problem is not debunking the economic myth of trickle down; papers on the theory not being supported by evidence have existed for decades. The real problem is in changing the political balance in power and in changing the tax system (properly). Not to mention public education on the structure of society with respect to wealth and income distribution. There needs to be discussion on wealth accumulation, transfer, and appropriation versus labor. Racism is woven in there alright, too.
We also know that health and education opportunities are linked to wealth and income. All the more reason for revision to policy actions. Still, the political will and power have yet to be assembled.
Here’s a quote from Michael Lewis’s book ‘The Fifth Risk’ that haunts me as also being a factor: “… how profoundly ignorant even highly educated people are when it comes to the structure and function of our government. The sense of identity as Citizen has been replaced by Consumer. The idea that government should serve the citizens like a waiter or concierge, rather than in a collective good sense.”
The direction of the trickle is UP. It has always only ever been UP. Debunking the big lie of “trickle down” is its own forever war.
Bush the senior called it ‘voodoo economics’ and then was taken to the woodshed when selected vice president. Even the Republicans who invented this baloney surely knew it was bogus. But look at all the Democrats who went along with the Reagan tax cut.
Could be our problem is not bad ideas but bad people.
Could be our problem is that people have no idea why taxes are necessary or what their original purpose was.
Trickle down economics did not work in the 1890s (Cross of Gold) and it hasn’t worked since.
Why do people fall for these ridiculous theories?
Because the looting rich give a megaphone to the loony economists, showering them with approval (innovative, thoughtful, ground breaking research) and accolades and prizes and tenured positions and speaking engagements. To the average punter, the whole thing looks legit, which is the aim.
And the looting rich also suppress, smear and dismiss any activist economist or academic who has built an audience by calling out the scams.