The first reference to trickle-down economics came from American comedian and commentator Will Rogers, who used it to derisively describe President Herbert Hoover’s stimulus efforts during the Great Depression. More recently, opponents of President Ronald Reagan used the term to attack his income tax cuts.
How is trickle down economics related to supply side economics?
However, it neither shows nor proves a correlation between a reduction in top tax rates and economic benefits to low- and medium-income earners. Trickle down economics is akin to supply-side economics, which holds the belief that what’s good for the corporate world will trickle down through the economy benefiting all.
What do you need to know about Trickle down theory?
What Is Trickle-Down Theory? Trickle-down economics, or “trickle-down theory,” states that tax breaks and benefits for corporations and the wealthy will trickle down to everyone else. It argues for income and capital gains tax breaks or other financial benefits to large businesses, investors, and entrepreneurs to stimulate economic growth.
Who is the Nobel laureate for trickle down economics?
In 2016, Nobel laureate Joseph Stiglitz wrote that the post-World War II evidence does not support trickle-down economics, but rather “trickle-up economics” whereby more money in the pockets of the poor or the middle benefits everyone.
How is trickle down economics different from supply side economics?
Trickle-down economic theory is similar to supply-side economics. That theory states that all tax cuts spur economic growth. Trickle-down theory is more specific. It says targeted tax cuts work better than general ones. It advocates cuts to corporations, capital gains, and savings taxes. It doesn’t promote across-the-board tax cuts.
What did the Pope say about Trickle down theory?
In 2013, Pope Francis referred to “trickle-down theories” in his apostolic exhortation Evangelii Gaudium with the following statement (No. 54): Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world.
