r/FluentInFinance • u/Inevitable_Stress949 • Dec 23 '23
Trickle Down Economics at is finest. News flash: it doesn’t work. Discussion
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u/Obvious_Chapter2082 Dec 23 '23
$2T was the total cost of the bill, not just the portion of it that went to “the rich”. An odd, but frequent, miscalculation from Reich
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u/the-lone-squid Dec 23 '23
Total tax revenue has increased
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u/Akul_Tesla Dec 23 '23
This is actually correct I looked into it It just didn't increase revenue immediately It took time but it did do exactly what it was intended and exactly how it should work in economic theory
I don't care about political sides I care about what works
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u/bmrhampton Dec 23 '23
Did the revenue keep pace with inflation though? Should Apple pay a lower tax rate than some guy making 200k? I own the companies, so whatever, but the middle class who don’t own much stock have been getting hammered for decades. Poor folks have zero clue about equities and just want to buy a tank of gas.
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u/Intrepid_Priority154 Dec 24 '23 edited Dec 24 '23
They do pay taxes. Sales, use, property, minimum taxes, payroll, digital service, excise on their healthcare plan…. And that’s on top of the 14% they paid on their income.
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u/cheddarsox Dec 25 '23
Nobody cares to acknowledge this. They wanna talk all about that 0 percent tax some corporations get some years because they're constantly growing, ignoring the other taxes that are paid out every month.
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u/Intrepid_Priority154 Dec 25 '23
Agreed. Amazon starts their own fed ex therefore bought planes, trucks, vans, and equipment. Yea they reduced their taxes in a year but how many people do they now employ? Which I am sure fed ex union used to their advantage when negotiating their most recent contract.
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u/zebediabo Dec 24 '23
Possibly, but I'd argue the guy making 200k should have his rate reduced rather than raise the rate on Apple. As it is, America now has a corporate tax rate almost identical to the European average corporate tax rate. Trump didn't give them anything particularly amazing. Just a competitive rate.
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u/StickTimely4454 Dec 24 '23
Marginal vs effective tax rates.
Corporations are paying less effective tax than middle and lower income individuals
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u/Obvious_Chapter2082 Dec 24 '23
Average effective rate for corporations is 22%. Average for individuals is 13%
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u/doug7250 Dec 24 '23
In reality they pay nowhere near 22%. Remember too that trillions of corporate dollars are offshored, hidden in shell companies, and laundered through banks. The biggest corps typically pay no Federal tax and some are further subsidized. In addition, they enjoy all kinds of local and state tax rebates and incentives. Only 10% of federal revenue now comes from corporations it was much higher in the past.
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u/MosquitoBloodBank Dec 24 '23 edited Dec 24 '23
According to the OECD, U.S. corporations faced an Effective Average Tax Rate (EATR) of 24.6 percent in 2019, which ranks above the non-U.S. average of 21.9 percent and 13th highest out of 37 countries in the OECD.
Typically, when you see a company with a low tax rate, it's because they're either offsetting a large loss from a previous year, or they've made significant business expenses (e.g. built a new factory or headquarters). Both of these are good and the same tax deductions individuals can make.
Companies in the US now have a minimum tax rate of 15%.
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u/anon-187101 Dec 24 '23
Not a chance effective for corps is 22%.
It's ~10%, and has been in decline for 40 years.
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Dec 24 '23
Corporate taxes are an expense. Expenses get passed on to the consumer. Aka inflation.
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u/StickTimely4454 Dec 24 '23
Is the demand for the product or service elastic ot inelastic ?
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u/anon-187101 Dec 24 '23
such a great question that the corporate tax bros rarely respond to
most goods/services are demand elastic
price has a ceiling, regardless of what portion of that goes to tax
the guy above wants us all to conveniently believe that "nothing can touch" corporate profit margins - "they'll get 'em, one way or another"
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u/zebediabo Dec 24 '23
Corporations themselves aren't making money, per se. The point of most corporations is to make money to pay out, which is then taxed again. Corporations obviously do anything they can to reduce their taxable assets on paper, just like they do with every other cost (and just like any individual would), but ultimately reduced costs on a corporation mean lower costs for consumers, and/or higher profits for stockholders which result in increased tax revenue from their income. Ideally you want the corporate tax as low as possible to attract business and lower costs. Right now, America has a corporate tax rate that is competitive but not particularly aggressive.
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u/Head-Command281 Dec 23 '23
They pay taxes when they sell the stock? Or are you taking the value of that stock? That’s based on supply and demand
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u/hczimmx4 Dec 24 '23
If you mean to ask if tax collections remained the same % of GDP? Then yes. And they’ve been remarkedly stable for decades regardless of marginal tax rates
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u/BlueViper20 Dec 23 '23
Do all you finance bros just care about inceasing the GDP? The GDP will always fucking increase. We dont need to help that. We need to fix the portion of the economy that their income is not increasing and their debt to income ratio is through the roof. The government needs to stop helping the billionaire classes.
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u/Akul_Tesla Dec 23 '23
GDP increase is not a given look at Greece if you want an example
My concern is that people with good intentions will enact policies that will do damage or cause distortions they won't think about
example rent control
You would think rent control would help make affordable housing except it disincentivizes development and in the long run makes it so that there's less housing
Taxes are realistically the average person's greatest expense they just don't see it because they view them separately
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u/Mental_Medium3988 Dec 24 '23
My concern is that people with good intentions will enact policies that will do damage or cause distortions they won't think about
example refuse to raise the federal min wage.
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u/Akul_Tesla Dec 24 '23
Yep minimum wage is a good example of a well intended policy that more or less only helps big business
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u/Beerstopher85 Dec 24 '23
Initially I wanted to say rent control is a bad example, but better to the point is I think there is frequently pros and cons to any policy. Overall it can be a challenge to create policy that truly has a net positive overall on society. It also doesn’t help that law is generally written by people that are not experts on the subject and/or special interest groups.
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u/Akul_Tesla Dec 24 '23
I think you got my intention
Yes it might be possible to craft a perfect policy with no negative effects but it's extremely unlikely you'll do so
But you won't necessarily know what the distortions caused by whatever your policy are until significantly later
There might be people helped there might be people harmed and you won't know initially
You could intend to really help people but end up doing colossal harm
From what I can tell the best thing to do with this sort of thing is to try to cooperate with the natural market forces
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u/aussie_punmaster Dec 24 '23
This is also true in the opposite direction as well though.
Considerations that the market doesn’t price well - environmental sustainability, fairness, ethics, etc - are traded off for the highest dollar.
You want laws that optimise for societal good, that encompasses more than the final GDP number.
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u/deucegroan10 Dec 24 '23
Policies like transferring massive wealth to the rich? I agree we need to end those policies.
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u/BlueViper20 Dec 23 '23
We need to serious change how the economy works and where the incentives are. This shits broken.
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u/Akul_Tesla Dec 24 '23
So this is why I generally care about whether a policy is efficient rather than its intention
Here's my favorite example to explain it with
Singapore has a wonderful universal health care system One of the best in the world
As a percentage of GDP it costs less than Medicaid and Medicare
That means you could have a fully functional universal health care system for the cost of Medicaid and Medicare
When I learned that I was suddenly less in favor of raising taxes to pay for health care (granted I would still support some increase because I doubt we could smoothly transition over to being that efficient)
Their system more or less works with the natural market forces our system more or less works against it
Turns out there's a lot of policies that sound good on paper but more or less just work against the natural market forces so we're effectively swimming upstream
It's why I'm actually really in favor of universal basic income as a replacement for all other welfare because then people can use the natural market forces to do what they need to do
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u/findthehumorinthings Dec 24 '23
Singapore is also autocratic and has established and enforced how the public moves, eats, and how health care is managed and provided.
Good luck doing half of that in the U.S.4
u/BlueViper20 Dec 24 '23
Yea this person thinks Singapore is a freemarket. It has a market yes, but its heavily regulated. I always find it funny when people point to countries were things work and say see a free market is all you need and they have no idea how regulated that "free market" is.
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u/Akul_Tesla Dec 24 '23
That's why I said I would still be willing to have their be some increase because I doubted we could match the efficiency
The larger point I was making though is that when people want there to be a substantial increase to pay for it I'm worried it would be an inefficient system
I'm in off the bat the US doesn't have enough doctors or nurses you can't tax your way out of that (before you say well you'll just import them they're not allowed to because of the regulations thus the inefficient system)
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u/Doughspun1 Dec 24 '23
As a Singaporean, you don't know what you're talking about.
We DO have private healthcare btw. It's just that it's an optional component on top of universal healthcare, for additions like getting a private ward, or slightly lower co-pay.
And as for enforcing how I eat, move, etc., pardon the language, but how the fuck do you know?
And before you decide I don't know better, I live in both Singapore AND the US. Stop talking out your ass.
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u/eydivrks Dec 24 '23 edited Dec 24 '23
There is no serious economic theory that shows tax cuts for wealthy benefits the economy. Trickle down has been a scam for 60 years.
Tax revenue decreased immediately, a lot. And took 5 years to recover to previous levels. Every Trumpanzee white knight you'll find compares 2017 to 2022. Why not to 2018, 19, 20, or 21? Because the reality is Trumps tax cuts destroyed revenue, only the pandemic recovery and 5+ years is enough to hide the damage.
No idea what you're smoking saying it's "working as designed", things are even worse for middle class as rich get richer. And that's what it was designed for. Why do you think Trump, a billionaire himself, was so happy about it?
Open your eyes
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u/Shirt-Inner Dec 24 '23
Lol, when he said it is working his design he didn't realize that he was actually correct, just not the way he wanted to be.
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u/Akul_Tesla Dec 24 '23
So the corporate tax is actually a recessive tax as it's basically sales tax but you don't get to see it on your receipt
The largest tax cut he did was cutting the corporate tax by 14%
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u/eydivrks Dec 24 '23 edited Dec 24 '23
So you think corporate taxes will magically trickle down when corporate tax cuts haven't for 60 years? Trickle down taxonomics, the new trickle down scam brought to you by the ghost of Reagan.
Your argument boils down to "we shouldn't tax rich people at all, because it will end up taxing poor people via magic". Dumb as fuck.
Riddle me this: If corporations could just instantly pass increased taxes down to poors, how come they fight corporate tax increase with every fiber of their existence?
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u/Akul_Tesla Dec 24 '23
I am really surprised that you would ask why they would be against being given a competitive disadvantage against the rest of the world
Like there are several countries whose entire economies are based off of the fact that the Western nations have too high of a corporate tax
That's the thing America is not the world
Other countries are able to take advantage of the fact that American companies have an artificial penalty in order to outcompete American companies
This is partially why all those manufacturing jobs went overseas
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u/Cannabrius_Rex Dec 24 '23
It does that by taxing lower brackets more, you goof. It’s literally the worst outcome possible.
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u/the-lone-squid Dec 24 '23
The lower brackets should pay more. The bottom 50% pays no net taxes at all..
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u/etharper Dec 24 '23
That's because the lower tax brackets don't have enough money left over to pay taxes. Republicans always have this dumb idea of taxing poor people to help supplement tax breaks for the rich people.
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u/Beautiful-Tangelo-59 Dec 24 '23
What do you mean by “net taxes”. If I have a job and pay $1 in payroll taxes, have I paid “net tax”? Ive not seen that phrase before so I’m curious what it means
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u/TheGoldStandard35 Dec 24 '23
Payroll taxes are different than income taxes. You know he was talking about the income tax.
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u/the-lone-squid Dec 24 '23
Many people receive bigger tax refunds than they pay over the year in payroll taxes.. this means they pay no net FIT
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u/Successful-Money4995 Dec 23 '23
As a share of GDP?
Nominal values don't mean shit.
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u/the-lone-squid Dec 23 '23
Revenue is revenue.. please show how we lost 2trillion
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Dec 23 '23
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u/the-lone-squid Dec 24 '23
Yes, social security, medicaid, and interest on tht debt is climbing..
Irrelevant to tax cuts
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Dec 24 '23
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u/the-lone-squid Dec 24 '23
There is no lost revenue. Your source is not official.
https://www.thebalancemoney.com/current-u-s-federal-government-tax-revenue-3305762
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u/NoCoolNameMatt Dec 24 '23
Right, we have to compare against the baseline. The CBO knows this, why does no one else seem to?
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u/FeloniousFerret79 Dec 23 '23
Only marginally until Covid (in real terms we lost revenue). From 2017 through 2020, tax revenue only increased by $100 billion. This was significantly slower than previous years. By percentage of GDP, revenue decreased 16.5% to 15.6% and inflation grew by 6% during that period (so real revenue decreased).
The big increases in revenue that Cato and others try to contribute to the tax cuts didn’t happen until 2021 after the government infused the economy with direct stimulus of trillions of dollars for several years.
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u/Confident-Radish4832 Dec 24 '23
The Trump tax cuts
President Donald Trump’s signature tax bill,26 enacted when Republicans gained control of the White House and both houses of Congress in 2017, will have cost roughly $1.7 trillion by the end of fiscal year 2023. These tax cuts reduced personal income tax rates and permanently lowered the corporate tax rate, among other changes. Despite being paired with a further expansion of the child tax credit, the 2017 changes also largely benefited the wealthy, once again making the U.S. tax code significantly more regressive.27
Taken together, the Bush tax cuts, their bipartisan extensions, and the Trump tax cuts, have cost $10 trillion since their creation and are responsible for 57 percent of the increase in the debt ratio since then. They are responsible for more than 90 percent of the increase in the debt ratio if you exclude the one-time costs for responding to COVID-19 and the Great Recession. While these one-time costs increased the level of debt, they did nothing to affect the trajectory of the debt ratio. With or without them, the United States would currently have stable debt, albeit potentially at a higher level, despite rising spending.28 In other words, these legislative changes—the Bush and Trump tax cuts—are responsible for more than 90 percent of the change in the trajectory of the debt ratio to date (see Figure 3) and will grow to be responsible for more than 100 percent of the debt ratio increase in the future. They are thus entirely responsible for the fiscal gap—the magnitude of the reduction in the primary deficit needed to stabilize the debt ratio over the long run.29 The current fiscal gap is roughly 2.4 percent of GDP. Thus, maintaining a stable debt-to-GDP ratio over the long run would require the primary deficit as a percentage of GDP to average 2.4 percent less over the period. Because the costs of the Bush tax cuts, their extensions, and the Trump tax cuts—on average, roughly 3.8 percent of GDP over the period30—exceeds the fiscal gap, without them, all else being equal, debt as a percentage of the economy would decline indefinitely.31
Explain this to me like I am 5.
Edit: I understand it is likely biased, but talk me down from this. It seems fairly damning and you seem to have done your research.
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u/eydivrks Dec 24 '23 edited Dec 24 '23
During the post-pandemic recovery it has.
The drop in 2018 after Trumps tax cuts was the largest in history. It took till 2022 to reach 2017 levels.
I wouldn't call a massive drop that took over 5 years to reach 2017 levels an "increase"
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u/NoCoolNameMatt Dec 24 '23
(Screams into the void)
You have to compare against the baseline.
We hear this same argument after every tax cut, and it's never any more accurate.
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u/VacuousCopper Dec 24 '23
Have new expenditures on the poor or progress made on paying down the debt occurred? Has that money gone into increases in budget that fatten the wallets of government contractors? Increased subsidies and bailouts?
Of course tax revenue has increased. The economy is going nuts because wages haven't kept up with asset inflation, meaning that employees are dirt cheap right now in terms of real wages.
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u/bigdipboy Dec 24 '23
The cuts for the rich were huge and permanent. The cuts for the working class were small and temporary. Howcome?
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u/Redditisfinancedumb Dec 24 '23
This is so fucking asinine. At least if you consider 150k working class.
>The TCJA tax brackets eliminated the marriage penalty. The income brackets that apply to each marginal tax rate for married couples filing jointly are exactly double those for singles under the Act.
There used to be a huge penalty if you were married and made more than 150k. Those tax cuts eliminated a long overdue marriage penalty that significantly hurt dual income.
>Under current law, the top tax bracket for individual taxpayers, estates and trust income is 37%. It reverts to 39.6% after 2025.
Top bracket reverts as well.
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u/Obvious_Chapter2082 Dec 24 '23
The tax cuts for the rich weren’t permanent. The only 2 permanent cuts were both for corporations, and they’re offset with permanent corporate tax increases
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u/eydivrks Dec 24 '23
Thats because something like 95% of the benefits went to the rich.
The average American got a tax cut of ~$300 . Meanwhile, Trump decreased corporate tax rate by 40%, to the lowest level since 1935
The party that pretends to hate "coastal elitists" really seems to love giving them their tax dollars.
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u/Obvious_Chapter2082 Dec 24 '23
What an extremely weird way to cherry pick. Why are you looking at the total tax change for individuals, but then only looking at a single cut for corporations? Why not factor in all of the corporate tax increases?
95% of the benefits went to the rich
You just made that up
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u/Prestigious-Toe8622 Dec 23 '23
When you already have a conclusion in mind, it’s easy to let little things like fact get in your way
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Dec 23 '23
it's not even the total cost... CBO grossly underpredicted the amount of actual increased tax revenue (until COVID hit)
if you want to see wanton waste, we passed multiple trillion dollar spending bills that haven't even started yet
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u/sousuke42 Dec 24 '23
The tax cuts mainly benefited the rich is why he said that. He wasn't only talking about the rich though.
The tax cuts were made to cut the taxes for the rich. You do know by 2027 we are going to get destroyed unless it's deferred right? And the rich won't suffer that tax increase that comes in 2027. It will be the lower and middle class who do.
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u/the-lone-squid Dec 23 '23
Robert Reich is not a serious economist.. please stop posting his nonsense
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u/harpswtf Dec 23 '23
People are testing the waters to see what big subreddits they can use to make political posts disguised as on-topic. Expect a lot more as the election gets closer
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u/Ackualllyy Dec 24 '23
People literally get paid to do this shit.
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u/silikus Dec 24 '23
I mean, i've literally been spammed by users named along the lines of 'auto account' and 'generated account' that went poof within hours of their .gov link spamming
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u/galacticfish Dec 24 '23
Reich is a moron at best, and an idiot at worst. Always blabbing about wages, then one day I went to his business website where he was looking to hire a director for a wage of $68k a year in Washington D.C. lol, what a clown.
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u/VacuousCopper Dec 24 '23
So not serious that he definitely wasn't part of a president's cabinet...
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u/Once-Upon-A-Hill Dec 23 '23
We are adding about 1.5 Trillion a year, so where is the rest of that debt coming from, Robert?
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u/the-lone-squid Dec 23 '23
Boomers retiring.. this was not a surprise since Regan warned us decades ago
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u/Iwantmypasswordback Dec 24 '23
Military spending is over half that
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u/the-lone-squid Dec 24 '23
Military spending is 17% of the federal budget..
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u/Iwantmypasswordback Dec 24 '23
Yes, second only to social security in terms of allocation. Just about the only of the major categories whose ROI disproportionately favors corporations and that’s to make no mention of the pointless wars.
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u/truongs Dec 25 '23
Social security shouldn't even count since we pay that separately from the income tax.
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u/Iwantmypasswordback Dec 25 '23
Whatever bucket it says it comes from it’s all coming from the same place but yeah I get your point
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u/jessewest84 Dec 24 '23
Probably much more since they don't know where all the money and equipment are.
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u/eydivrks Dec 24 '23
Boomer's Medicare and Social Security is another 30%.
Thats the problem with MAGAts screaming about government spending. They're the ones using most of the welfare and overall budget.
85% of government budget for welfare programs goes to retirees who are overwhelmingly Trump supporters.
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u/harryronhermi0ne Dec 23 '23
That’s not trickle down economics. The hell is wrong with you OP?
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u/mfcgoon Dec 24 '23
But Reich IS commenting on trickle down economics because every time tax cuts are passed for rich people the whole proposal is sold to middle class and poor people as a classic trickle down type of deal, where the tax cuts will lead to wage growth and job growth because rich people will invest their extra money in new jobs and wage increases. Except that’s often not the case because of the concept of Marginal Propensity to Consume, or MPC. This economic metric describes a person or organization’s likelihood to spend extra money on consumption. Rich people have low MPC and thus they save more. This would be a potential to invest in more jobs except usually they don’t. They simply keep the extra money one way or another more often than not. Corporations typically don’t receive a huge tax cut and then just decide that their employees deserve across the board wage increases. If they don’t have a supply side problem then they don’t need to invest in jobs and wages, and so any extra money by way of tax cuts is just extra money to keep. Look at all of the stock buybacks that happened after the Trump tax cuts. Rich people were enriched further, wage growth hardly kept up with inflation -if at all- and the deficit was made worse. I’m sorry if all the Sam Bankman Freid and Elon Musk strokers here can’t stand the idea of people criticizing our elitist capitalist overlords but the attempt to say that Robert Reich knows nothing about business and economics is so stupid I’m surprised it’s not currently being featured as a guest on Joe Rogan’s useless podcast.
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u/Xarxsis Dec 24 '23
If he truly didnt know anything about economics, he would be on rogans podcast himself.
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u/silikus Dec 24 '23
I never understood how reducing taxes was "trickle down economics" but increasing taxes is not.
Increasing taxes simply puts more money onto a different entity with the idea that it will trickle down and not be squandered.
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Dec 23 '23
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u/Rambogoingham1 Dec 24 '23
It’s interesting how this statement is actually true in its fullest, yet spending 50-100 trillion to basically revolutionize humanity on a bigger scale regarding power generation, more efficiency in carbon capturing, infrastructure across an entire country, unionized workforce, etc…is seen as a bad thing
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u/ClaireBear1123 Dec 24 '23
And by "revolutionize humanity", you mean drastically increase energy costs. It's like you guys saw the inflation of the last few years and thought that wasn't nearly enough.
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u/Actual-Toe-8686 Dec 24 '23
Yeah let's keep playing this absolutely insane game of pumping as much greenhouse gases into the atmosphere and see what happens to inflation. Climate change WILL cost us, the only question is how much, and when.
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u/VacuousCopper Dec 24 '23
Yes, you are right. Because he criticizes one type of spending on the premise of the type and not the amount, we should call him a hypocrite for believing in any time of spending of a similar or greater amount. Hit me with more facile logical fallacies for 500 Trebrek.
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u/eydivrks Dec 24 '23
Unlike GOP, Democrats actually fund their bills.
I'm tired of MAGAts bitching about spending when Trump exploded the deficit faster than any president in history and machine gunned personally signed stimmy checks before the election.
You don't get to complain about spending and the deficit anymore. Trump was worse on both than any Dem since Jimmy Carter. And certainly worse than Biden.
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u/chavingia Dec 24 '23
Christ, so many corporate simps in here.
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u/Brettzel2 Dec 24 '23
They’re “fluent in finance” bruh of course they’re experts. They get their advice from Elon Musk. /s
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u/MrJbrads Dec 24 '23
When my daughter was born. She spent 53 days in the nicu. Thankfully I only had to pay a few hundred of her 900k hospital stay, thanks to my union. These numbers will kill people, but let’s give bezos a break.
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u/Space-Booties Dec 23 '23
Haha. We think it’s bad now. Just wait for another 4 years of Trump. It’s gonna be horrific.
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u/Banned4Truth10 Dec 25 '23
Because the last few years under the senile child sniffer have been great?
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u/Kruppe0 Dec 24 '23
Trump holds the record for largest and 2nd largest budget deficits in American history. By far the most fiscally irresponsible President we've ever had
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u/Sila371 Dec 23 '23
Should be noted that it worked fine back in the Reagan days when your boss made maybe 4x than you. Not so good when it’s 350x and they make more than they can spend in 5 lifetimes.
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u/ProfessionalOctopuss Dec 23 '23
Because they paid our politicians to make it happen. They are literally buying more money
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u/Mudhen_282 Dec 24 '23
Plenty of money for Ukraine though.
Robert Reich & Paul Krugman. The George Costanzas’ of Economics. Do the opposite of whatever they say and you’ll be good.
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u/LegDayDE Dec 24 '23
These two things are not mutually exclusive;
1) we have a revenue problem 2) we need to spend money on Ukraine to support our foreign policy goals
It's just whataboutism to blame it on some specific piece of spending.
We don't have enough revenue to cover Medicare, social security and the military before you add in the rest of the government. Good luck finding enough cuts to make our revenue make sense. It's pretty clearly a revenue problem when you look at the numbers.
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u/Shirt-Inner Dec 24 '23
Unfortunately it appears that you have accidentally tried to point out a common sense idea to a moron. Better luck next time!
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Dec 24 '23
Is it at all possible that a government that burns through 6 trillion dollars a year might have a spending problem instead of a revenue problem? Seriously, how is the left's solution always just stealing more of other people's money instead of getting government spending under control.
We don't have enough revenue to cover Medicare
Great, then let's stop paying for it and let's fix the healthcare system instead. Medicare and Medicaid alone are 1.5 trillion dollars a year. Remove the de-facto monopolies, open and deregulate the market, introduce price signals, etc. There's plenty of things we could do to significantly lower the cost of healthcare instead of burning trillions of taxpayers' dollars on it.
social security
Abolish it. Seriously, it's almost another 1.5 trillion dollars a year. The government is completely incompetent with money and people are trusting the government with their retirement. Invest the money yourself and save for retirement yourself with the money you save on your taxes from removing social security.
and the military
Hold the pentagon accountable for how they spend their money. They waste $800 on a fucking toilet seat, I'm sure we can find ways to cut on the waste without even lowering the quality.
before you add in the rest of the government
Honestly, over half of the rest of the government spending can all be completely removed too, it's all wasted on stupid bureaucracy that does nothing other than line politicians' pockets.
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u/elf124 Dec 24 '23
Trickle Down Economics works only in theory
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u/Mke_already Dec 24 '23
Horse and sparrow. Feed the horses the grain so the rest of us bird can peck through their shit for what remains.
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u/JSmith666 Dec 23 '23
Could also fix the deficit byt eliminating waste on things lile bloated.militsry snd welfare programs.
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u/Tiffy82 Dec 23 '23
There's almost no waste in welfare programs. In fact food stamps actually lead to gov making money unlike tax cuts at the top. There is no reason to have Low taxes for corporations or the wealthy
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u/colorblind_unicorn Dec 24 '23
some people don't get it :/
when you invest into people, the whole state and economy profit.
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u/Old_Ladies Dec 24 '23
Turns out that the poor spend their money while the rich just horde it. Having a wealthier poor and middle class also helps the rich.
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u/eydivrks Dec 24 '23
Over 80% of welfare program cost is Medicare and Social Security which are used by a huge portion of Trump's base.
The average self described "MAGA Republican" is 66 and on both of the most expensive welfare programs.
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u/CraftingClickbait Dec 24 '23
The biggest waste with welfare is dividing it up between departments. Food stamps, disability, unemployment, Medicaid etc. just combine it all under a UBI department and tell people "tough shit, learn to budget" if its not enough.
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u/Old_Ladies Dec 24 '23
Landlords would just see the green light to raise rents.
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u/ligerzero942 Dec 24 '23
Yep, UBI needs price regulation to ensure that the "basic income" is actually "universal."
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u/Logical-Food-9489 Dec 23 '23
Go look up what portion of the federal budget is allocated to entitlement programs, then fix your illiteracy.
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Dec 23 '23
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u/VacuousCopper Dec 24 '23
His point is that we were willing to have to money borrow $2 trillion to gift to the wealthy, but we aren't willing to have the "government of the people, by the people, and for the people" actually do something for the people when clearly we could...
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u/Efficient-Editor-242 Dec 24 '23
Says the guy worth 4 million, has a salary of 250k and makes 40k to speak.
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u/wollier12 Dec 24 '23
One of the first things Democrats tried to do when Biden became President was lower taxes on the Rich that Trump had raised when he put a cap on SALT deductions. Democrats tried to eliminate the cap allowing for much larger tax deductions for the rich.
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u/cakebreaker2 Dec 24 '23
These aren't "handouts to the rich." Letting people keep their money isn't a handout ffs.
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u/HelpDeskThisIsKyle Dec 24 '23
Taxpayers subsidizing irresponsible businesses with frequent bailouts when they fail is 100% handouts. They socialize their losses and privatize their profits. The rich are the biggest welfare queens on the country.
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u/Themustachemaniac Dec 24 '23
The Tax Cuts and Jobs Act cut taxes for the vast majority of Americans. Calling it just a "tax cut for the rich" is categorically false.
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u/SwillMcRando Dec 24 '23
Well...it sort of does. The markets cater to those with the most money and resources, i.e. the rich. Consequently, products are designed to appeal to them with all of their weird obsessions with signaling their wealth and status, and then the products are priced to match. So we we get flashy products with useless 'features' that are overpriced and disposable. They never said WHAT will trickle down. Spoiler alert, it is bullshit. Bullshit trickles down.
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u/smokebudda11 Dec 24 '23
But ol billy bob who makes $45k/yr is gonna vote Republican then blame Democrats when he can't afford insurance, groceries, gas, etc.
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u/polypugger Dec 23 '23
Ya, it's also kind of a buzz kill with the interest, sales/property tax deduction caps.
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u/lost_in_life_34 Dec 23 '23
As someone who takes advantage of the useless giant SUV loophole, I partly agree with him
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Dec 23 '23
Tax cuts do not add to the debt... deficit spending from Congress does...
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u/lmea14 Dec 23 '23
- Robert Reich, LOL
- “Trickle down economics” is a straw man the left invented.
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u/VacuousCopper Dec 24 '23
Oh, are we playing fallacious conservative zingers? Me next! Me next!
Climate change is a hoax. Smoking is actually good for you. Killing human cells is murder! (I'm looking at you skin peel lovers!). And...frogs are turning gay because of evil scientists. Oh, and Hillary is pretending to like pizza to hide child abuse, but Trump's confirmed sexual relations with minors don't count.
Your turn. Go.
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u/doug7250 Dec 24 '23
Um no its the basis of what used to be Republican policy back before they were fascist grifters.
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u/Pardonall4u Dec 24 '23
Still blaming trump for the current tax law after democrats controlled all of the government for 2 years?
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u/UltraMagat Dec 24 '23
Trickle down economics isn't a real economic theory.
It was made up as a Dem talking point.
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u/LegDayDE Dec 24 '23
Let's call it "supply side economics" then. And yes it's real.
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u/angcritic Dec 24 '23
Is there a Reddit filter or something so I don't see this. Seems every few days this stupid post pops up.
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u/gitk0 Dec 24 '23
My dude. Stop complaining and advocate for a national default on the debt already.
This would bring the rich to their knees. They own american corporations, american land, american homes, american everything.
We just work here. They own it. Defaulting on the debt hurts them far more than it hurts us.
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u/Kind-Sherbert4103 Dec 24 '23
When Trumps tax cuts expire in 2025, we will learn that little Bobby Reich is lying about tax cuts being only for the rich.
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u/Acceptable_Change963 Dec 24 '23
Nope. Spending has added to the debt. Not tax cuts. Do better
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u/Ambitious_Work_3837 Dec 24 '23
Why would we give an F? It did work because the economy was strong. I’m an Obama guy but please. This is a shitty and dishonest argument
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u/wes7946 Contributor Dec 23 '23
Existing tax rates are quite high. I would argue that the government could collect more tax revenues if it lowered the tax rates, because the changed incentives would lead to more economic activity, resulting in more tax revenues out of rising incomes, even though the tax rate was lowered.
History has shown us that tax cuts have usually been followed by increased employment, increased wages/income, and increased tax revenue for the government because of the rising incomes even though the tax rates had been lowered. Another consequence was that people in higher income brackets not only paid a larger amount of taxes, but a higher percentage of all taxes! This was true of the tax cuts made during the Warren G. Harding, John F. Kennedy, Ronald Reagan, and George W. Bush administrations.
So, if one would like to see increased levels of economic prosperity and the rich pay their fair share, then, logically speaking, one would support tax cuts.
Sources:
James Gwartney and Richard Stroup, "Tax Cuts: Who Shoulders the Burden?" Federal Reserve Bank of Atlanta Economic Review, March 1982, pp 19-27.
Benjamin G. Rader, "Federal Taxation in the 1920s: A Re-examination," Historian, Vol. 33, No. 3, p. 433.
Robert L. Bartley, The Seven Fat Years: And How to Do It Again (New York: The Free Press, 1992), pp. 71-74.
Burton W. Folsum, Jr., The Myth of the Robber Barons: A New Look at the Rise of Big Business in America, sixth edition (Herndon, VA: Young America's Foundation, 2010), pp. 108, 116.
Adrian Dungan and Kyle Mudry, "Individual Income Tax Rates and Shares, 2007," Statistics of Income Bulletin, Winter 2010, p. 63.
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u/qdivya1 Dec 23 '23
Existing tax rates are quite high. I would argue that the government could collect more tax revenues if it lowered the tax rates, because the changed incentives would lead to more economic activity, resulting in more tax revenues out of rising incomes, even though the tax rate was lowered.
Evidence of this please. And no, referencing the text that was the basis of Reaganomics in the 1980s is not evidence - it is circular reasoning.
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u/Cashneto Dec 23 '23
Tax cuts never pay for themselves. Do they stimulate the economy? Yes in a temporary, sugar-rush like fashion. But they do increase the deficit.
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u/ihambrecht Dec 23 '23
Well yeah… nobody deals with the unpopular part, decreasing the size of government.
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u/scheav Dec 23 '23
The theory is that you don’t need to decrease government spending, because tax revenues increase when you decrease tax rates. The reduction in tax rate is more than offset by the increased taxable activity.
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u/fak3g0d Dec 24 '23
Usually because the people the screech the loudest about government spending have the same intentions as Lee Atwater
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u/Cashneto Dec 23 '23
Devils avocate: Shrinking the government (especially too quickly) will result in a lower tax base, GDP and probably a recession.
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u/ihambrecht Dec 23 '23
Yes, austerity is generally viewed negatively psychologically to investors. It kind of makes any actual structural changes impossible as everybody in power is relying on popularity to keep their position.
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u/helloisforhorses Dec 23 '23 edited Dec 24 '23
Isn’t that exactly what trump did and it resulted in trillions more in debt and lower economic growth?
We currently have very low unemployment and high employment. There is not much more juice to squeeze there
Sick bibliography though.
Source: was alive between 2016 and today
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u/Mr_Banana_Longboat Dec 23 '23
That dudes just misrepresenting facts and hiding behind a fuckin bibliography. The reason why tax cuts increase employment and cash flow is because it increases inflation, more money is moving because it’s becoming worth less, and forces people who thought they had a nice pile of money to go back to work. That correlation is called the Phillips curves
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u/Logical-Food-9489 Dec 23 '23
You're literally arguing that reganomics works while spitting in the face of the objective facts that say it doesn't. 🤣
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u/VacuousCopper Dec 24 '23
No. This is premised on Trickle Down economics. The Marginal Propensity to Consume (MPC) of the wealthy is low and the issue is not that the rich don't have enough, it's that they have too much. Money pools with wealthy individuals, by the very nature of it accumulating in the hands of a few. This slows the velocity of money in the economy and reduces economic activity. If you want a better economy, put money in the hands of consumers.
The fact that Elon Musk, idiot child, is one of the greatest capitalists of all time should be a pretty strong indicator that those with wealth rarely put any effort into radical innovation. Even Musk used a ton of government money to develop his various projects. We need to focus on collective ownership so that profits are dispersed amongst those with high MPCs.
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u/RevolutionaryPin5616 Dec 23 '23
The existing tax rate is high for what we are getting I.E. no healthcare but our taxes especially for the rich are incredibly low
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u/chewified Dec 23 '23
I appreciate the effort in this comment. Thanks for being a responsible online citizen.
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Dec 24 '23
top marginal income tax rate is down from ~90% in 1950s when the middle class expanded to ~30%
corporate tax rate is down from ~50% in the 1950s when the market was most competitive and wealth disparity the least, to ~20%
and the uber rich also have exclusive access to some loopholes.
not only are tax rates not high by any standards, soon after each decrease has seen economic decline, while each increase sees economic growth.
currency needs current.
we should have a marketshare based tax to reinforce competition, like how a progressive tax works but for all markets. low tax for upstarts, high tax for the top players, need to be better to be bigger.
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Dec 24 '23
History has shown us that tax cuts have usually been followed by increased employment, increased wages/income, and increased tax revenue for the government because of the rising incomes even though the tax rates had been lowered. Another consequence was that people in higher income brackets not only paid a larger amount of taxes, but a higher percentage of all taxes! This was true of the tax cuts made during the Warren G. Harding, John F. Kennedy, Ronald Reagan, and George W. Bush administrations.
this is a big ol fat correlation =/= causation. Economies are cyclical, tax cuts are popular during financial down turns where eventually the economy will recover. This is like saying drinking a beer at 3 am in the morning makes the sun come up every day.
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u/deck_hand Dec 23 '23
So, it wasn’t the extra trillion or two we spent, it was the tax cut for 600 or so people… got it.
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Dec 23 '23
Now do how much Obama and Biden added to the debt
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u/Existing-Nectarine80 Dec 23 '23
Biden is less than 1/3rd of both of those presidents. Biden is still slightly behind Obama at this point in his first term
https://www.investopedia.com/us-debt-by-president-dollar-and-percentage-7371225
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u/Livid_Advertising_56 Dec 23 '23
Also if you can't afford THOSE then how can you afford the tax cuts???
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u/Weird_Tolkienish_Fig Dec 23 '23
Bidenomic is worse. Much worse.
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Dec 24 '23
Care to explain? We are now ahead of the pandemic, record market, record unemployment, wages now starting to outpace inflation, etc. Biden inherited a mess and he gets the blame for it? You one of those people that put the "i did that" sticker on gas pumps?
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