Ah, the trickle down effect

Have you ever noticed that the color of the fluid that trickles down is........yellow?

You’ve probably heard of it.

The trickle down theory of economics posits that incentives (read: tax cuts) for those at the top of the financial food chain (i.e., the wealthy) will spur investment and development throughout the economy. That, in turn, will supposedly result in monetary gains for those down the line (i.e., working class people), which then should take the world to the brink of Nirvana (sarcasm intended).

Blather. Bunk. Baloney. (Insert your own derogatory epithets and characterizations here.)

A study by David Hope and Julian Limberg of King’s College in London “...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.” (1) (2)

My snarky takeaway: the color of the fluid that trickles down is……..yellow.

Let us roundly dismiss trickle down with all of the contempt and opprobrium it deserves.

Sources:

(1) https://theconversation.com/footing-the-covid-19-bill-economic-case-for-tax-hike-on-wealthy-151945

(2) https://eprints.lse.ac.uk/107919/

Background:

https://www.bloomberg.com/news/articles/2020-12-21/trickle-down-economics-fails-a-sophisticated-statistical-test

https://www.washingtonpost.com/business/2020/12/23/tax-cuts-rich-trickle-down/