Fifty Years of Tax Cuts for Rich Didn’t Trickle Down, Study Says

Tax cuts for rich people breed inequality without providing much of a boon to anyone else, according to a study of the advanced world that could add to the case for the wealthy to bear more of the cost of the coronavirus pandemic.

The paper, by David Hope of the London School of Economics and Julian Limberg of King’s College London, found that such measures over the last 50 years only really benefited the individuals who were directly affected, and did little to promote jobs or growth.

“Policy makers shouldn’t worry that raising taxes on the rich to fund the financial costs of the pandemic will harm their economies,” Hope said in an interview.

The authors applied an analysis amalgamating a range of levies on income, capital and assets in 18 OECD countries, including the U.S. and U.K., over the past half century.

Their findings published Wednesday counter arguments, often made in the U.S., that policies which appear to disproportionately aid richer individuals eventually feed through to the rest of the economy. The timespan of the paper ends in 2015, but Hope says such an analysis would also apply to President Donald Trump’s tax cut enacted in 2017.

“Our research suggests such policies don’t deliver the sort of trickle-down effects that proponents have claimed,” Hope said.




https://www.bloomberg.com/news/arti...-cuts-for-rich-didn-t-trickle-down-study-says

Another link....

Governments shouldn’t be worried that raising taxes on the rich will harm their economies when deciding on how to pay for COVID-19. Our new research on 18 advanced economies shows that major tax cuts for the rich over the past 50 years have pushed up inequality but have had no significant effects on economic growth or unemployment.
These findings shed new light on a debate that has long divided policymakers, with one side claiming higher taxes on the rich could raise revenue and reduce inequality, and the other arguing that low taxes on the rich are the best route to wider economic prosperity.
The data suggests that low taxes on the rich bring economies little benefit. This suggests there is a strong economic case for raising taxes on the rich to help repair public finances following the pandemic.
As the COVID-19 pandemic is putting government finances under pressure worldwide, higher taxes on the rich are back on the political agenda. In the U.S., the president-elect, Joe Biden, has promised to raise taxes on top income earners and corporations. Voices demanding a wealth tax have also become louder in the U.K. and Germany. Given the damage the pandemic has done to economies, the notion of getting the most affluent to help foot the bill is one that has many supporters. But once again this is being countered by those who insist that low taxes are crucial for stimulating the economy.
Such arguments about the efficiency advantages of low taxes on the rich have been powerful drivers of previous tax cuts. The graph below shows a new comprehensive indicator that measures taxes on the rich across countries and over time by combining the most important taxes on the rich including taxes on top incomes, capital and inheritances.
Since the 1980s, many countries have legislated major tax cuts for the rich. For instance, the two Reagan tax cuts in the U.S. reduced top rate taxes substantially in 1982 and 1987. In the U.K., taxes on the rich dropped significantly under the Thatcher administration, with major tax cuts in 1979 and 1988.







https://www.marketwatch.com/story/h...0qeGQrhS2_4cipiRYmrHPaKDSSiZDzny4JOmO5OYJppg4

In other news, water isn't dry.

You don't say!

Good thing the dems chose Biden. I am sure he will fix things.

Biden is a continuation of the existing regime - which essentially took power with Reagan. It staggers on, discredited and disliked.

But @garamet says he is a great guy. I don't remember who told me that we need someone like him right now to make things all good. Doing nothing to correct the problems Trump exploited is what Biden is bragging about doing, so I am sure that all of Trump's followers will just evaporate and we have vanquished the problem with Biden just like people like @Quest tell me. It is not like now the election is over some of you people could start kicking Biden to try to correct the problems of patriot act overreach, FISA courts, ICE, corporate welfare, The rich not paying their share, big oil pollution, Bank regulation, and white supremacist policing, just to name a few things.

In the mean time Biden is putting on the gimp suit while Moscow Mitch is lining the US up like Marcellus. This is all while the Biden Bootlickers are just waiting for their turn. Marcellus is going to get raped and there is no rescue coming.

In other news, water is wet, and poor, dumb, religious Republicans can't help but vote against their self-interest, as the most highly propagandized group since Mao and his little red book.

It's true, trickle-down has been shown not to work. If you're gonna lower taxes, you need to lower them for everybody.

Nope, you need to break up billionaires and their disproportionate impact on our society, and reinvest in people. And yes, I trust the government to do that better than I do Koch, Bezos, Adelson, Soros, or even Gates.

All of those guys did extremely immoral things to get where they were, even if they later realized that there's no point in having a hundred billion dollars.

The 'American Dream' of becoming a rags to riches story is virtually DOA. Of the top 20 OECD countries, the US rates 19th on socioeconomic mobility. Sweden, Germany, Italy and France all do the 'American Dream' better than we do.

Turns out insane education and health care costs impact societies in a lot of ways. One of the biggest is people who are born poor almost always die poor. And with wealth changing the rules for itself all the time, hiring the best liars in the world for lobbying, accounting, lawyers, and PR, it is very difficult to fall out of the upper echelons.

Really, Rick? Lower taxes strike you as a bad idea, does it?

It strikes me as an irrelevant idea, certainly not the answer to this question.

I’m guessing he disagrees with the idea that everyone needs lower taxes. Millionaires and Billionaires need higher taxes.

we've been getting about $450/week relief here for those of us whose industries have been fucked up.

In the time the program has been running, the two dozen richest people/families in the country have seen an increase in wealth equal to about half of what the relief and unemployment insurance has cost.

Think about that... 24 people gained as much as 12 million others, and little of the former money directly recirculated through local economies.

Government bills need to be paid, just like personal bills. Even cutting out corporate welfare, the government still has bills. If we lower the taxes "for everybody", who is going to pay those bills?

Or do you not understand why we pay taxes?

We pay taxes to fund government. The argument is over how much government we ought to be funding. I come down on the side of minimal government. History has shown irrefutably that governments cannot be trusted and will always seek to accrue more powers. Therefore, you have to restrain the government and one way to do that is to limit its available funds.

By making poor people poorer and rich people richer?

yet history likewise as irrefutably shows that the ungoverned (for lack of a better antonym) can be trusted somewhat less than a legislative body that can be held responsible... as has been shown by the outgoing "presidency", concentrated wealth works against the general welfare/popular will.

We are living through a textbook example of what "minimal government" looks like

It's a pretty massive failure (and I don't just mean bumblefucks, but deliberate choices made under the political worldview that governments should be smaller, weaker, and do less.
And not just when it comes to the pandemic but a hundred other things like, for example, the huge deficit of infrastructure projects that MUST be remediated at a cost that is staggeringly high precisely because we spent 40 years electing not to do them.

It's not untrue that government cannot be unleashed, but neither can it be starved because ultimately it's the people (non-billionaire type people) who go hungry

That's funny because I live in Northern VA. outside of DC. and this place is ever expanding in housing and population due to the ever expanding government. If this is what minimal government looks like then even the minimum is still too much.

How has it shown that?

If it is irrefutable that this is always the case it should be easy to prove.

More to the point, how has it shown that be both true and preferable to putting the same power in private hands?

I'm sorry, but if you think what we have is "minimal government" then you've drunk too much kool-aide for me to help you. Even in a supposedly free country like the US, the government has its fingers in everything. Licenses, regulations, laws, restrictions, compulsory activity, on and on. Trump has fiddled on the edges, mostly trying to benefit himself, but the massive and pervasive federal edifice remains fully intact.

Would you believe "ineffective government" then? Federal agencies are astoundingly unable to do their jobs.

Aside from all the checks and stops Trump has bulldozed.

Most federal agencies execute their core missions reasonably well. But the government is made of people, and people are idiots, so . . .

It's at least as much to do with the tech industry. If you don't like that, I suggest you don't live in Silicon Valley East. Datacenter Alley is going to continue to expand.

...so better to leave the important decisions to those based on overt greed (corporations) and ignorance (churches). Organization is what moves society, and the alternatives to a democratic government are expanding the powers of oligarchy and theocracy.

And shouldn't you quit your government job if this is what you truly believe?

How minimal would you like?

I still need a paycheck. And corporations and churches are also made of people, so the "idiot" part stands.

Within Constitutional limits. Government's job is to establish a level playing field, not to decide winners and losers. Government's job is collective defense of our society, in both military and law enforcement terms. Government's job is to guarantee our rights (NOT provide them). Government's job is to ensure that we're a society of law, not of people. It is NOT government's job to tell you who you can love or marry, how much money you can make, how you choose to express yourself, what services you can or can't make use of, which ideas you're exposed to, how you educate yourself or your hellspawn . . .

We fund the government so they can ... pay bills. Your paycheck, for example, is a bill that must be paid by the government.

And, yet, you still have not demonstrated how collecting fewer taxes will pay those bills - or fund whatever powers you choose the government to have.

So, please, stop obfuscating and explain how collecting fewer taxes will "fund" the government or pay the bills or whatever stupid words you wish to use here.

You are such an idiot . . .