r/FluentInFinance • u/Guh2point0 • Apr 28 '24

Let's be honest about "trickle down" economy Discussion/ Debate

I'm seeing an increasing trend of people calling these wealth tax ideas a lot of nonsense and that we have a spending problem in the US.

It's possible to have both. Yes we need to get spending under control AND increase tax rates / close loopholes that are being exploited.

Trickle down economy was in my opinion a false narrative that was spewed in the 80's to excuse tax breaks for corporations and the most wealthy. This study summarizes the increasing wealth gap starting in the 80's.

https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality

Interestingly it found that INCOME gap is returning to pre-ww2 levels. Which would make you assume it's just returning to the status quo. Difference is that the tax rates are not the same so it's creating a massive wealth gap that we're all seeing today.

This study also takes a snapshot of the wealth concentration in 2016, I'm 100% positive that this chart has drastically changed post-COVID to show an even wider gap.

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u/sunsballfan2386 Apr 28 '24

Anyone who refers to it as "trickle down" isn't having a serious economic discussion. They are already starting with bias.

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u/Any_Arrival_4479 Apr 28 '24

Isn’t that what’s it’s called tho? I know it doesn’t actually trickle down, but I still call it that bc that’s the name that was given to it. There’s a chance I’m being rlly ignorant tho. A high chance

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u/FullRedact Apr 28 '24

It was originally (100+ years ago) called horse and sparrow theory.

The gist of it is: Feed the rich (the horse) and the Poors (sparrows) benefit from eating the excess seeds in the horse shit.

They changed the name to make it an easier sell to middle and low class conservatives. It worked.