Tax cuts for the rich only increase wealth disparity
No, the 1% aren’t the job creators—that’s the middle class and working class. Tax cuts for the 1%, of course, don’t create jobs, they just create greater wealth disparity:
“The authors set out to examine all instances of major tax reductions on the rich in 18 OECD countries between 1965 and 2015 and identify the results . . . There was no noticeable effect on growth. Or on unemployment. So what did the tax cuts accomplish?
“We find that major tax cuts for the rich push up income inequality, as measured by the top 1% share of pre-tax national income. The size of the effect is substantial: on average, each major tax cut results in a rise of over 0.7 percentage points in top 1% share of pre-tax national income.
“On the income inequality side, the results do not closely align with the theory that the rich have greater incentives to work and invest when their taxes are cut, given that we do not find any statistically significant effects on growth, unemployment or investment from cutting taxes on the rich.”
We can look forward to more of the same in the next four years. All those middle class and working class folks who voted for Trump will see him shoveling more money at the 1% and crumbs for the rest. MAGA=Making America’s 1% Greater Again.
What tax cuts for the rich actually accomplish
“The authors set out to examine all instances of major tax reductions on the rich in 18 OECD countries between 1965 and 2015 and identify the results . . . There was no noticeable effect on growth. Or on unemployment. So what did the tax cuts accomplish?
“We find that major tax cuts for the rich push up income inequality, as measured by the top 1% share of pre-tax national income. The size of the effect is substantial: on average, each major tax cut results in a rise of over 0.7 percentage points in top 1% share of pre-tax national income.
“On the income inequality side, the results do not closely align with the theory that the rich have greater incentives to work and invest when their taxes are cut, given that we do not find any statistically significant effects on growth, unemployment or investment from cutting taxes on the rich.”
We can look forward to more of the same in the next four years. All those middle class and working class folks who voted for Trump will see him shoveling more money at the 1% and crumbs for the rest. MAGA=Making America’s 1% Greater Again.
What tax cuts for the rich actually accomplish
When Reagan was elected in 1980, it was rather obvious that middle class had chosen to self-destruct. By the late 1980s, it was rather obvious that the divide between the haves and have-nots was widening into a chasm. The 1987 stock market crash clinched it. Traditionally, the stock market had something to do with the health of the economy, but in the 1980s it was just rich people using their tax cuts to drive up the price of stocks. I was just getting into the market in those days, but even a naif like myself could see what was happening. The market recovered rapidly. Recessions don’t affect rich people the way they hit people who work for a living. The market continued and continues to boom with minor setbacks. That confirmed my theory at the time: there was nothing to invest in, working people had less and less money, and so, like everyone else with money, I’d do best to buy stocks.
@Kaleberg,
In 1980, we started investing in a money market fund. We ended up saving enough as grad students and postdocs that in 1987, we had enough for a down-payment on a house so we didn’t have to pay mortgage insurance. We’ve been invested in equities from then into the present, through our 403bs (we didn’t have pensions) and other investments. The Trumpenproletariat don’t seem to have benefitted.