Neoliberal gospel says that cutting taxes on the wealthy will eventually benefit everyone by boosting economic growth and reducing unemployment, but a new analysis of fiscal policies in 18 countries over the last 50 years reveals that progressive critics of “trickle down” theory have been right all along: supply-side economics fuels inequality, and the real beneficiaries of the right-wing approach to taxation are the super-rich.
No surprise that this argument by lobbyists for the rich proves bogus.— Sheldon Whitehouse (@SenWhitehouse) December 16, 2020
Reduce taxes on rich and you get richer rich, not stronger growth. https://t.co/UXILu5O5wW
“Cutting taxes on the rich increases top income shares, but has little effect on economic performance.”
—David Hope and Julian Limberg
The Economic Consequences of Major Tax Cuts for the Rich (pdf), a working paper published this month by the International Inequalities Institute at the London School of Economics and written by LSE’s David Hope and Julian Limberg of King’s College London, examines data from nearly 20 OECD countries, including the U.K. and the U.S., and finds that the past five decades have been characterized by “falling taxes on the rich in the advanced economies,” with “major tax cuts… particularly clustered in the late 1980s.”
According to RAND report, this is how much "richer rich" they've become.https://t.co/aXZetC24J5— Grace van Thillo🌍 (@gvthillo) December 16, 2020
But, according to Hope and Limberg, the vast majority of the populations in those countries have little to show for it, as the benefits of slashing taxes on the wealthy are concentrated among a handful of super-rich individuals—not widely shared across society in the form of improved job creation or prosperity, as “trickle down” theorists alleged would happen.
“Our research shows that the economic case for keeping taxes on the rich low is weak,” Hope said Wednesday. “Major tax cuts for the rich since the 1980s have increased income inequality, with all the problems that brings, without any offsetting gains in economic performance.” read more…