I think trickle down economics is used as a generic term now to describe any tax cuts to the wealthy or large corporations. The fact the term had fallen out of use doesn’t mean the principal still doesn’t exist in the political rights thinking.
Actually, my point was that it was never IN use. Like the “War on Women”, which entered into the lexicon through a Dem operative asking on national television how the GOP was going to end it (which is a when-did-you-stop-beating-your-wife logical fallacy) “trickle down” it appears to have entered into the lexicon from its opponents, who falsely suggested it was a real economic strategy that the GOP were following, probably back in the 1980 election cycle.
What we know is that having more money in the private sector, rather than the government sector, increases economic activity. Because it’s the private sector, we can’t control if that activity is in the stock market (not so great for the little guy) or Subway franchises (good for the little guy).
I agree that there were more factors than just deregulation and tax cuts to the wealthy that harmed those states economies. Doesn’t necessarily explain why those farm states in particular were harmed more since they by far aren’t our only two.
No, it doesn’t; and any economy, even small ones like Kansas and Louisiana, have multiple moving parts; you can never say “THIS (or WHO) is what caused THAT; end of story. They are all too complicated.
My view is that the primary error made by Brownback and Jindal is that they failed to realize how much of any state and taxpayer budgetary and business planning is influenced by the tax code. Businesses were jumping up saying “Hey, I made THIS investment WHEN I did BECAUSE of the tax code; if I knew you were going to change it (even if I might agree with it being changed) you’re going to have an adverse effect on my business.”
And without using the term ‘trickle down’ I think we can definitively state that the wealthy getting tax cuts doesn’t in the end help everyone. Sure there are some raises. Some new jobs in the private sector.
First off, let’s stop conflating two things that shouldn’t be conflated.
PERSONAL TAX CHANGES. We had a tax cut on top marginal personal tax rates from 39.6 to 35%, AND we lowered the marginal rates for EVERYONE in the process. If you were paying 28, now you’re at 25. If you were paying 15, now you’re paying 12. Etc. Etc.
At the same time, we increased the standard deductions, did away with the SALT deductions, and means tested the mortgage deduction. So, in EFFECTIVE terms, the personal changes did NOT fully return us to the Bush tax rates; they remain higher on an aggregate level. AND, the changes EFFECTIVELY benefit the LOWER tax brackets more than they benefit the HIGHER tax brackets, because of the standard deduction. A person making 50 a year who used to pay 3K and now pays nothing is a lot happier about it than the guy who makes 1M, used to pay 200K, and now pays 170K.
My personal take? I wouldn’t have lowered the marginal rates on the top earners, but done everything else. However, the democratic response to the personal tax changes has been nothing more than a pack of lies. Yes, rich people are going to get a tax break from the marginal rate changes, but it’s not like a 4.6% decrease is the end of the fracking world, especially when you consider that the majority of those rich people lost a very valuable tax deduction at the same time which eats up a good portion of that 4.6%. The government gave them 4.6%, then snapped at least half of that right back up from most of them.
CORPORATE TAX CHANGES. This is an ENTIRELY separate matter. The corporate reform had ZERO to do with giving a windfall to business; it had to do with restructuring the corporate tax system which was putting US businesses at at disadvantage (and costing americans their jobs); the GOP was VERY SIMILAR to the one Obama himself proposed, except that Obama’s plan only dropped the rate to 28%.
It incenses me when the left suggests that corporate tax reform was some sort of unnecessary political payback. You can google up PAGES of quotes from Democrats who supported corporate tax reform when Obama was pushing it, and even a few pages from supportive Democrats when Trump started talking about it.
At the end of the day, partisan politics won out over common sense, but let’s not let that take away from the fact that the corporate tax reform was the most important and positively consequential piece of economic legislation in nearly forty years, it would have passed in a bipartisan fashion if not for the Dem base insisting that their legislators block everything Trump does. Without it, we’d be looking at permanent GDP rates which would not support projected population growth and higher unemployment, meaning we’d be paying for our failure with our standard of living.
But at the cost of countless government jobs that generally are good paying middle class jobs, often enough to support a family, and reductions of services that benefit the bottom but are unneeded by the top. The wealth gap is the ultimate problem and deregulation and any tax cuts to the top 10 are just worsening it.
Several thoughts here:
- Dependence on government jobs, as opposed to private sector jobs, is a characteristic of third world countries. So I am not particularly concerned about this one. Further, watch out from above, because if the government was as automated and as productive as the private sector, you’d likely see the loss of another 20% or so off the federal rolls.
- So far, I am unaware of reductions in services which are consequential. I’ve heard that the sky is falling from the left, and a few suggestions from the right, but nothing concrete yet. (BTW, there should always be a healthy political debate about the level of social services provided by the government. Without it, you don’t have a government, you have Santa Claus.)
- I don’t know if the wealth gap, at its present size, is a problem or not. This size USED to be a problem, in the manufacturing era, but I am coming over to the opinion that the wealth gap is an inevitable consequence of the technological era and automation, an economic reality which rewards the top third of the population (the ones with the cognitive ability to work effectively with technology) and leaves everyone else behind. Jeff Bezos, after all, has created nothing new other than ways to route revenue away from existing businesses into his own bank account. So, I’d agree with you that less wealth gap is better, but (a) I think the old metrics on GINI ratio need to be rethought rather than blindly used, but also I’d point out that (b) the tax system is an inefficient way of solving an income inequality problem. More jobs is better.
Hope that helps.