Ex-lawyer turned relationship coach

Trickle-Down Economics Fuels Inequality

In the ‘80s, the economy of the United States was in shambles. Unemployment was high, prices were rising, and growth was slow. Incumbent president Reagan and his team thought they had the answer to save the American economy.

Reaganomics.

Which revolves around the trickle-down theory: lower taxes of corporations and businesses will use their savings to invest, creating higher wages and more jobs, which will finally increase spending.

But Reaganomics is controversial. 

Opponents argue that when corporate taxes are cut, social welfare programs suffer. And that the rich people in charge of the corporations will just get richer.

Reaganomics, however, was not just about lowering taxes. The other three cornerstones of Reagan’s solution involved: deregulating business, slashing social program expenses, and  giving government services over to private contractors.

The result?

Economic prosperity that continued through the rest of Reagan’s presidency. Although it’s unclear whether that had anything to do with the former actor’s measures. Critics argued that the economy would have recovered under the old conditions too.

Which meant that Reagan’s 42% tax break for the rich may have done nothing but fattened their already corpulent wallets.

Trickle-down economics has been a questionable topic for decades. But this month, after Dr. Hope and his team finished studying 50 years’ worth of tax cuts for the wealthy, we’ve got the final verdict.

Favoring the rich does NOT benefit the middle and lower classes. And how could it? Nobody can predict how the affluent spend their extra millions.

If the wealthy sit on their riches like a dragon sits on its gold, no one benefits but the person who enjoyed the tax cuts.

Don’t fall for trickle-down hogwash.

By Jeroen Elsing
Ex-lawyer turned relationship coach