I've been doing some reading on this and have run across various views on the Trickle-down theory. Some economist like Thomas Sowell say that there is no such thing as a Trickle-Down theory and that it has never been advocated by any well known economist at all and that it's often confused with supply-side economics. Then I read that believing in a Trickle-down theory depends on how you think free-markets will affect the economy. Do you think it exists? Does anyone know who first coined the term Trickle-down economics?
The term trickle-down economics was coined during the Reagan era. Sometimes it's also referred to as Reaganomics. It has actually been around much longer than that, just under different names. In short, it is the theory that decreases in taxes -- namely for big corporations -- stimulates growth throughout the rest of the economy. The theory is that if the expenses that corporations have to pay in taxes is reduced, the money saved will "trickle down" to the rest of the economy, triggering growth. Trickle-down economics exists more today than it ever has. It's a very corrupt, crony capitalist system, and does far more for the big corporations than it does the average citizen.
I think Sowell is right, there never really was a trickle down economics, but there was a supply side economics which said that the economy was overtaxed. In contrast to Rat's popular mythology, "big corporation tax" doesn't exist, and supply siders never targetted corporations of a certain size. Corporate tax codes, unlike personal tax codes, are not progressive. Corporate tax is corporate tax, and in the US the rate is higher than for most countries. For example it is higher than that notoriously out of control right-wing corporatist regimes known as.... Sweden? http://www.taxfoundation.org/internationaltax/intlcorprates.html
"The theory is that if the expenses that corporations have to pay in taxes is reduced, the money saved will "trickle down" to the rest of the economy, triggering growth. Trickle-down economics exists more today than it ever has. It's a very corrupt, crony capitalist system, and does far more for the big corporations than it does the average citizen." Yea, and the theory behind communism is that nobody will ever go without what they need. *snort* Perhaps that trickle down theory might have some merit, but like everything else it requires people to act decent....and god knows thats not going to happen. Do you (anybody) honestly believe that if a big corporation/the rich community has extra money from tax cuts that we're going to see any benefits from that? You're niave if you do.
I found this funny: " Trickle Down Economics theory is related to the old story that "if the horse has better hay to eat, the birds will eat better" (it being understood that birds eat manure). Reaganomics (to imply one example). If the rich do well, benefits will "trickle down" to the rest. Lower taxes on high income or capital gains will benefit most of the population, etc." Anyway,was the Trickle-down idea of Reagan based on any past economic policy? Were there past examples of tax cuts for corporations benefiting those in lower incomes that influenced Reagan's economic policy?
Hoover advocated supplyside economics as well. Look where that got us, He could have EASILY handled the great depression by allowing more money into circulation, but he basically dried up all credit in the country.
rat did a good job explaining trickle down economics... imagine that. Trickle down economics didnt work under Reagan, and it didnt work under Bush either... and yet there are still idiots who actually think this bullshit works.
naw its actually a theory to fool the poor. they say that they will cut corporate tax and that it will help you, cus the corps can then pay you more. but the corps just pull an enron, or sell your jobs overseas, and then they get an even larger amount of profit and capitol to exploit you with. just a new carrot to dangle infront of the same old horse, or better yet, the same old carrot danglin infront of the new horses.
