Tax the rich

Back in Ronald Reagan’s presidency, “trickle-down” theory was used to justify cutting the US income tax rate on the highest tax brackets from 70% to 28%. The theory was that lower taxes on the rich would lead to more investment and increase jobs and wages. The theory has arisen zombie-like ever since, used by wealthy politicians to justify favorable treatment for the upper crust.

The problem — as any working-class person could have told you — is that trickle-down theory doesn’t work. Not in the 1980s and not now.

A London School of Economics comprehensive study of the effects of tax cuts on the rich in 18 wealthy nations from 1965 to 2015 has a major takeaway: cutting taxes on the wealthy makes the rich richer but has no effect on economic growth or employment.

That strong, data-driven conclusion should be plastered on the walls of every legislator’s office.

Now more than ever, we are seeing the devastating effect on the national economy of the financial pain that every small business is feeling. Every corner restaurant that closes throws people out of work. Every store clerk and assembly-line worker who’s been laid off is a blow to the economy. Every parent who can’t get to work because the schools and daycares are closed is a drop of economic blood draining out of the country’s financial health. The rich are getting richer during the pandemic, but their financial well-being is not trickling down to the millions of people who are losing jobs, homes, and health.

Governments are now forced to spend huge amounts to help their people and their nations survive the pandemic. Who should pay for it? The answer is clear: tax the rich.

https://www.washingtonpost.com/business/2020/12/23/tax-cuts-rich-trickle-down/

#taxtherich, #trickledownfails, #pandemicstimulus