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- Hacker News
- Its been trickle up economics for a long time now.by 8by3
- The most effective economic policy to help the impoverished is to tax the rich and give the money directly to the poor.
The only reason this isn't common sense is because the rich have fought it for millennia.
- Doubtful. The UK is practically at this point with generous benefits and a very progressive tax curve (you don't pay any tax on the first £12.5k of earnings).
It seems like all it does is lock people into poverty with unreasonably high effective marginal tax rates.
by IshKebab - The poor will then give it back to the rich in higher prices for the same amount of stuff.
The only real way to tax the rich is to ensure that the rich have to compete for workers by paying competitive wages
by neilwilson - Well, yes — much like trickle down economics.by cdrnsf
- Yeah, turns out the trickle is just piss.by ceejayoz
- If we started the society/economy from scratch today, the current situation would seem absurd, inhumane and unacceptable. Imagine an inequality in scale of 10000s while you are only 1.5 more capable than the average.
(Very) rich people with their legal (eg tax loopholes) and illegal (eg sold politicians) tactics cost middle class people almost 100% their optimal income. Not to mention qualities of life like social state and safety. Calculations need a blog post.
by tsoukase - This is basically what happened in Orbán's 16 years in Hungary. He gave indirect tax cuts for the rich, or just generally everyone who is not living pay check to pay check (by hungarian standards it means you are rich). So for example installing solar panels came with a tax writeoff but the whole thing was setup that it only benefit who already have had enough money to install a full brand new solar panel system. So it didn't help at all those who are really in need. Same happened with EV cars. If you already have money for a brand new EV car you got it cheaper. For the rest? Good luck. Mind you this is eastern Europe where everyone is driving +15 year old diesels from Germany. The rich got richer.by haunter
- The same in Poland. Poland, Slovakia, and Hungary are oligarchic corrupted disfunctional hellholes. No, electing this new politician and party will not change anything. Without "license to steal and defraud" your life there will be miserable. Hopefully Russia will not take the easy opportunity and attack, but hey at least they'd erase the local "elites".
- Ehh, I don't know if those examples really apply, even if they effectively have a similar outcome. Incentives for environmentally friendly tech are more about helping those industries get off the ground against entrenched incumbents that are harmful to everyone. The benefit of less exhaust in the air is immediately good for everyone.
Although I'm sure government and corporate greed was able to exploit those policies as much as it could.
by dec0dedab0de - Same in Finland. The ruling party (represents the rich and the business owners) gave tax cuts for rich (high income earners and and those who have capital gains). Next they're planning to cut the business tax 4.5 percentage point. Eroding tbe states tax income while the state is already in the hole with a ton of debt. Of course the story is that these will kick off investments and make business boom. Best part is that to compensate for the tax cuts they're gutting the benefits including social security, unemployment benefits (highest unemployment in Europe btw) and calling those people lazy who just need "encouragement" to start working. A real hero pasty.
Similarly incentives to buy EVs naturally only apply to the folks who are better off. Most working class buy cars that are +10 years old. (The average car age is among the oldest in Europe btw)
by samiv - Quelle surprise!by teach
- The thing I don't like about this is that it treats trickle-down economics as if it's something that needs to be debunked. Trickle-down economics has never been a real economic policy, and never been seriously advocated by federal policy-makers. It is an entirely pejorative term created by detractors of supply-side economics.
The policies of supply-side economics, however, are much more defensible, but it seems people would much rather pick on the strawman.
by manlymuppet - I have literally seen it being defended, in all seriousness, after the economy crash. When the financial institutions were bailed out.
Maybe not the name, but the literal idea that the money given to them will flow down. There were even graphics gping with it. Again, in all seriousness.
So yes, it needs to be debunked.
by watwut - When you are rich, it allows a lot more time and funding to come up with arguments supporting policies that will make you even more rich.by dasil003
- You're right, it's not one lie, it's a pack of lies, trotted out every time congress needs to justify another capital gains tax cut or rationalize why the next tax hike needs to target work not wealth.
- Can you describe the defensible policies of supply-side economics? That's as vague a term as trickle-down economics to me.
Supply-side economics is based on a flawed premise of looking at only the Laffer curve and saying if taxes are too high the economy suffers, therefore we must make the tax rate arbitrarily low. In reality though there are more nuances to making the tax rate arbitrarily low (e.g. high inflation and cost of living for starters).
by vlovich123 - You'd think so but not even a decade ago Kansas tried it again and it failed and the GOP continues to cut taxes for the wealthy and people keep electing them.
Most of the nation (and world) never took any economics. This stuff is all magic or religion or whatever to them. Ronnie Raygun is as good as a saint to much of the US.
by alistairSH - > as if it's something that needs to be debunked.
When half the country has believed something for close to a half a century, across multiple generations, you bet your ass it needs to be debunked. The fallacy of the "precious job creators" is as American as "pulling yourself up by your bootstraps"
The fact that you and I were not dumb enough to fall for it doesn't really help anyone in the grand scheme of things. There's still an insane amount of work left in educating the public, and we may even be regressing at this point.
by ghurtado - So do %s/trickle-down/supply-side/g , then, if it's the term that's bothering you. Doesn't "debunking" trickle-down economics then, by extension, debunk supply-side economics? I'm not clear on the meaningful differenceby diabeetusman
- > Trickle-down economics has never been a real economic policy, and never been seriously advocated by federal policy-makers. It is an entirely pejorative term created by detractors of supply-side economics.
https://thehill.com/homenews/house/3522907-gop-lawmaker-byro...
Well here is one of those federal policy-makers you say doesn't exist, a Republican congressman, advocating four years ago for trickle down economics and advocating for "...letting the free market - and yes, trickle down economics, which does work - actually flourish in the United States"
- The rich don't pay income tax like us little people do, they don't pay capital gains tax like us either.
They can avoid both through schemes such as taking low salaries and borrowing against assets they will never sell for a profit.
The tax system would need a complete overhaul to plug those holes, but it would always be a game of whack-a-mole.
by CrzyLngPwd - Piketty's 2% tax floor on wealth (for those with over $10M/$100M in wealth) is an excellent way to fix this.
Basically the idea is to just accept the fact that the super wealthy will find the loopholes, so instead remove the loopholes. Just flatly put a minimum tax all wealth over $XX million at 2%.
One nice aspect of the policy is that it's a tax minimum: so people with high incomes who are already paying that much, regardless of how wealthy they are, don't need to pay the tax.
Another nice aspect is it's relatively easy to implement. There aren't that many people with $XX millions in wealth.
by danny_codes - > The average citizen seems to be fairly poorly informed that taxes on the rich have fallen really dramatically in the past 40 years.
There's an observation.
by drowntoge - The paper talks about economic growth, income distribution and unemployment.
I'm mostly interested in economic growth, so looked at what the paper claimed about that.
It found that major, sudden reductions in taxes on the rich did not have any statistically significant effect on the trajectory of economic growth over the following five years.
But:
- Their sample is small. They only looked at relatively large, discrete declines in their home-grown measure of taxes on the rich. They did not look at all tax-rate changes.
- They did not look at effects beyond the five-year horizon, which means it would probably exclude the impact on people starting startups, as the successful ones usually take more than 5 years to start making serious money. (or did during the period the paper considered, even if timelines have subsequently accelerated.)
- Big sudden tax cuts don't happen in a vacuum, and I don't see a way to control for confounding.
- The question I have is that at some point X taxes are collected and the economy is growing at Y, then the policies change and now X-5 taxes are collected and the economy grows at Y. What was the function of the 5 under the first regime?by wang_li
- Just look at growth rates before Reagan/Thatcher in the US/UK and after. If you take the 30 years before and the 30 years after, you'll see growth actually decreased.
Obviously this is correlation, but it's somewhat damning to the conservative gospel (dogma?) that lowering taxes somehow automatically produces more growth.
Given that we have no clear indicator that raising taxes on wealthy people would reduce growth (really, we have the opposite signal from the historical record), there seems little reason not to pursue greater equality.
by danny_codes - A lot of the poor and middle classes don't understand how a billionaire earning millions of pounds per week in passive income is any problem for them - or where it comes from
1, billion, 2 billion, 100 billion individuals makes no difference to the average person
In fact there's a misguided sense that they earnt that money through work and not rent seeking
But the sad truth of the matter is - the rich are on the other end of your mortgage or indirectly your rent - the other end of that business loan to your favourite coffee shop controls the price of your coffee - you pay them interest directly or indirectly through everything you pay for and they use that money to buy more of the assets you use - they are a massively increasing rent seeking class
Their wealth growth is exponential it compounds on itself some particularly rich people are seeing 40% annual returns and the overall economies wealth growth is 1 or 2%
It's analogous to a black hole things like capital gains tax and income tax mean nothing to these people because they don't sell and they don't have a "working" income because that's not how the ultra rich accumulate wealth
The sad thing is for people on benefits the government look automatically into your personal bank account and track anything coming in - they have built a massively invasive infrastructure to track the poor so they can remove their benefits if they try to earn £5 selling music or selling IT services - but if you're rich the government don't even know how wealthy you are - the government doesn't know how many billionaires there are - let alone any talk of having to tax them - so they get to pay very close to - if not nothing - whilst software engineers (as an example relative to this forum) in the UK get to be the high rate tax payers where 50% or more is taken
Everyone else has to fund their free ride and its absurd - they're the group that need the least support financially
by slifin - There's a parallel between welfare and passive gains from diversified investments; yet as you point out, government welfare is tracked and very visible, while private investments are far more opaque.
Part of the wealth that workers create is paid in taxes to the government; another part is paid to the shareholders of the company they work for, to the bank they get their mortgage from, and so forth. The latter is equivalent to an hidden tax, part of which goes toward a form of private welfare that's proportional to an individual's wealth.
People get quite angry about government welfare, particularly if the recipient seems undeserving of it. Yet they have no problem with the passive income from billionaires, even if it ultimately amounts to the same thing.
by weavejester - > you pay them interest directly or indirectly through everything you pay for
I wonder how feasible that would be to track as an economic index. Even on individual level its popular to workout which day of the year you start earn money you get to keep after income taxes and vat.