Stop me if you’ve heard this line before, tax cuts on the rich help wealth trickle down. Well I will say near conclusively that the policies of trickle down or reaganomics have failed at their goals and it is laughable for any serious person to repeat their ideas.
Let’s start with the basics with tax cuts and growth. We don’t see a negative correlation with tax and growth and may very well see a positive correlation at some levels. This one graph alone I think at least shows there is no correlation between taxation and growth.
Now let’s look at some other reasons why giving rich people more money isn’t good. First off we have the fact that the fiscal multipliers of tax cuts are lesser than things such as expanding UI or other welfare. As you can see cash transfers and infrastructure are way more efficient at creating multipliers than things such as tax cuts. So in the short term we see the best thing at driving consumption is just to give people money.
Now we can see an initial effect of welfare but let’s look at another effect. Welfare leads to higher degree of small business creation because it allows people to take more risks. A few examples of the before mentioned effects are that more forgiving bankruptcy loans make business creation easier, the next source I would point to is the amazing Olds dissertation on this (by the same logic welfare also creates more innovation)
So all and all I presented at least my case for welfare helping us develop our wealth
