Forty Two wrote: ↑Mon Aug 20, 2018 5:17 pm
Hermit wrote: ↑Sat Aug 18, 2018 4:48 am
Forty Two wrote: ↑Fri Aug 17, 2018 5:24 pm
One of the main concepts is that if you lower taxes on businesses from say 35% to 21%, it will operate as an incentive to economic growth because businesses will have more money in hand with which to operate, expand etc. The trickle down effect is that when business and industry do well, they have to employ people, and those people then get jobs that otherwise might not be there and the companies have more moThe major tax-rate cut of 1986, which took the top income tax rate down to a five-decade low of 28%, passed the Senate 97-3, as the nation enjoyed a long run of growth comfortably over 4% per year.ney to pay employees and offer incentives to employees.
It's been tried in 1986
I'm old enough to remember the 1980s, Ronald Reagan, and the tax cuts. They did work, and the economy improved markedly.
http://time.com/4511870/john-f-kennedy- ... ax-policy/ "The major tax-rate cut of 1986, which took the top income tax rate down to a five-decade low of 28%, passed the Senate 97-3, as the nation enjoyed a long run of growth comfortably over 4% per year."
Revenue boomed as a result of the Reagan tax cuts:
https://www.wsj.com/articles/reagan-cut ... 1501800678 "The Reagan tax cuts laid the foundation for a quarter-century of strong, noninflationary growth, which, despite three subsequent recessions, averaged 3.4% until the beginning of the Obama administration. And tax revenue was generated by an expanding economy rather than pilfered through bracket creep."
Forty Two wrote: ↑Fri Aug 17, 2018 5:24 pm
This does help maximize the well-being of society.
Going by past experienc, it increases profits and does nothing to help employment or household income. Trickle down economics is a con.
...except that it works, and has been shown to work. The evidence is that it works.
What people forget or purposefully ignore is that before Reagan's overhaul, there was massive stagflation. A stagnant economy, high unemployment (double digit), and high inflation (inflation like 10% annually), and ridiculously high interest rates (in 1978, the fed raised interest rates to 20% to try to stop inflation). The government's revenue was going up annually due to "bracket creep." There were like 15 tax brackets, and inflation of 10% a year, so as people's wages went up following roughly along with inflation,they'd get booted to higher income brackets without actually having more buying power.
Reagan simplified the tax system, and reduced rates considerably, across the board, and it did, in fact, help. Along with deregulation, and other adjustments, inflation was brought down, interest rates were brought down, unemployment was brought down, etc. It's Reagan's policies that had him reelected in a landslide and the good economy was why Bush,Sr. was elected in 1988. George HW Bush swept the country in 1988 - 426 Electoral votes and carried 40 out of 50 states. It wasn't because the economy sucked.
There is no doubt that business did rather well under Reagan's trickle down economics. Corporate profits definitely improved during his presidency.
https://tradingeconomics.com/united-sta ... te-profits
However, you said "This does help maximize the well-being of society". Did it? Let's have a look. Did increased corporate profits lead to a drop in unemployment?
https://tradingeconomics.com/united-sta ... yment-rate
No. Unemployment remained higher under Reagan's eight year presidency than when it started until its last four months, and even when it finally was lower, it was not by much.
So, perhaps salaries and wages went up for those who did manage to hang on to their jobs?
https://tradingeconomics.com/united-states/wage-growth
No again. Except for two brief periods wages were below the point at which Reagan's presidency commenced.
Not even Reagan's cut in personal income tax rates improved the lot of wage earners. During his presidency they managed to put less and less of their income aside in the way of savings. Though inflation was much reduced, it rarely dropped below the 4% mark. This more than destroyed the benefits of those cuts.
https://tradingeconomics.com/united-sta ... al-savings
You keep sticking to the theory. I note you failed to support it with facts. I provided the stats showing how trickle down economics panned out under Reagan. Again, here is the summarised comparison between trickle down theory and trickle down fact.
So again, trickle down economy is a con.