Does trickle-down work?

These threads are hilarious to me because I can always point out who has never bothered to study economics

>Protip: its like 95% of the posters in these threads

so then is my whole point moot, or are you just being pedantic to have something to counter me on?

Brainlet here, whats the actual theory?

fellow brainlet, but basically this
en.wikipedia.org/wiki/Supply-side_economics

I have a cousin that has a master's in economics and I'll try to repeat his argument. I don't agree with it, but in theory it goes that the low taxes stimulate spending among the wealthy, and that active investment process creates jobs and wealth that help everyone. It's more about the quantity of wealth that goes to the bottom 90% more than the quality of individual jobs.

why don't you agree with it?
after all, it's those upperclass folks who are ALREADY creating jobs without the incentive, what's to say incentivizing doesn't automatically in some capacity help everyone?

Sounds like universal basic income

In my own experience yes big tax cuts for corporations translates into more jobs and better pay for workers. After Trump's tax bill passed the company I work for gave out a slew of promotions and raises that were long over due for the lower positions in the company. I think those at the top got like 1% raises at most, but I got a 25% raise and a coworker friend of mine got a 40% raise AND a promotion into the leadership team, because the company has decided to hire about 20 more people this year and needs more team leaders.

So when am I supposed to be mad about the tax breaks again?

I wouldn't be opposed to UBI if we abolished all other forms of welfare.

>In very soecific andcpretty unlijely conditions, yes.
ftfy

>
All economic policies work under certain conditions.
True. But trickle down rarely works and it didn't work under Reagan.
Wealth, more often than not, trickles up.

Isn't that the idea? Like that and incoming automation of jobs are the biggest reasons people want UBI

>Wealth, more often than not, trickles up.
how so?
the lower classes may not have "kept the wealth" but they have access to MRI's and Iphone's and cheap cheeseburgers that they didn't create for themselves, so they've benefitted somehow from the wealth distribution in this country i.e. the wealthy produce things for everyone

Im a brainlet too, so im not saying I understand the difference any more than you do, but I heard Thomas Sowell say they were different and he seems trustworthy

who's to say?
people never stop wanting or feeling like they need more
you give someone UBI then the feel entitled to property, and etc.

Because isn’t there a point where maximum efficieny is achieved? I mean sure, it would create jobs up to a point, but why would some industrialist reinvest money into making jobs if there’s no room for his business to expand?

When the Last boomer dies and tells you that Social security you paid your whole life into is gone because the Boomers never set up a structure to pay for it.

W-why not lower taxes for EVERYONE :)

I think one of the best things about the policy is it's done without implications on people motivations or wishes

I can't promise that industrialists will be upstanding memebers of society and that they won't exploit people, it's just going off the basic fact that they ALREADY do X so giving them more money to do X should make the gears go faster

desu I am a financial brainlet, so I could be off my fucking rocker here

Most people don't have your experience

The wealth of rich people is comprised of a large numbers of smaller bits, accumulated into the combined wealth of the person in question. Rich people as a whole do not produce iPhones and cheeseburgers. Rather the are on the receiving end of a large production chain that produces the phones and burgers. Poor people put work and other recources into that chain and get compensated on a 1:1 ratio (on average)
Rich people put in capital and intellect and get a far better deal.
Hence, the combined effort of the many poor trickles up into the combined wealth of the few.

Btw, I'm not saying this is a bad thing.

>social security
>actually relying on social security for your retirement
Holy hell you are dumb. Please tell me you at least are putting 10% of your income into a 401k, or an IRA of some kind if your job doesn't have a 401k? Let me tell you a secret friend: nobody who is upper middle class or above relies on social security or factors it into their longterm savings plans. Social Security is for poor people who can't save money on their own. I plan to retire with over 1 million tax-free dollars by the time I am 45 and I'm well on my way to that.

Empirically, no

This is the most teenage thing I have ever heard (not that I am necessarily agreeing with the user you replied to).

A million dollars in a pension fund is peanuts if you are 65, the idea you could retire at 45 with that level of chump change is laughable.

Your view of things is badly skewed. Without the capital of the rich the company never would have been founded and those poor people would have no jobs in the first place. You are viewing wealth as a zero-sum game, because the rich profit more than the poor, you treat it as though the poor do not profit at all. Do they not have jobs? Are they not earning a living? How does that not count as receiving wealth? And is that job not the result of some rich man's entrepreneurial investment?

Yes, the wealth of the wealthy is generated off the labor of many poor people, so that each poor person contributes a little of the wealthy man's wealth, yet pretty much the entirety of the poor person's wealth is the result of the rich man's investment into the economy.

fair enough

No, wealth accumulation is an inherent characteristic of the capitalist system.

>A million dollars in a pension fund is peanuts if you are 65
Not everybody lives in New York and California, kid. A million dollars will last a person about 30 years where I live, accounting for property tax and living expenses in a comfortable neighborhood and still have plenty left over. Seriously, you should do research before you open your dumb mouth.

>. A million dollars will last a person about 30 years where I live

Assuming you have no medical bills, no family and want to live like a poor person and want to run out of money early in retirement then your plan seems perfect then!

Somewhat but the question is compared to what.

If you set up a tax system where the rich benefited from re-investing their profits in the country and were penalized for doing otherwise, the political economy would probably work a lot better.

Corporate tax cuts are good, definitely. The problem is, tax cuts to individuals making >$1M

Those needs to be taxed on both capital gains and incomes. That way rich won't get richer, but the money will still flow back into the economy.

Isn't that the whole point of inflation, if the rich person keeps their money in the bank the value will depreciate over time - if they reinvest the wealth and put it to work their wealth could very well increase over time.

Again, try actually looking up the living expenses for states besides California and New York. You have a warped view of what living expenses are.

How the fuck are your medical expenses that high compared to the rest of the first world. Isn't private healthcare supposed to lower prices through competition?

I don't live in California or even the USA. A million dollars isn't even a big retirement fund for someone retiring at a normal age you fucking retard.

Except inflation harms anyone who doesn't have property.

That's some bad public policy of that's the sole intention. Inflation's actual purpose is keeping the state's finances afloat and giving discount credit to large financial institutions.

If you tax the rich too heavily then you end up killing ambition and they move to a country where ambition is not punished by the state. Do you think it is coincidence that USA has a collection of the best athletic talent in the world, when we pay our athletes an order of magnitude more money than any other country? Even communist countries realized this and that's why they ended up creating a class system within their supposedly class-less societies: those people with talents useful to the state were given special privileges not available to the common proles, because if they did not reward such talent they would defect to countries that did reward them.

If you have money or a good insurance plan (which requires money) you'll have the best health care in the world.

If you're poor or irresponsible you'll be fucked.

Looking at other country's health care, its generally better off to have a universal system of some kind.

A million tax-free dollars is enough to live a middle class lifestyle for about 30 years where I live. Wherever you live, it sounds absurdly expensive just to survive there.

Only if we get rid on inheritance and punishing people for negative externalities or profiting by creating negative economic value for others.

The American healthcare system isn't a fee-for-service market its like a Cable-TV market. You have to pay for a bunch of services you don't use and you can't opt out.

And on top of that the government also pays for poor people's subscriptions at the market rate.

The entire system is poorly designed.

Its actually exactly what is defended in practice. You dont need a phrase to describe it but even without it its a republican belief that is stated over and over in the news by republican politicians

>A million tax-free dollars is enough to live a middle class lifestyle for about 30 years where I live

So as I just pointed out, not even enough to get you close to a decent age, without even taking into account all of the other expenses you will find you have to deal with when you grow up.

>through competition
The state made competition in the medical industry illegal. No really. There used to be medical lodges in the US in the early 20th century, community-funded clinics that were fairly cheap and accessible. But hospitals lobbied against them saying the doctors who worked at them were not properly trained and were posing a danger to the community and only doctors who were certified by the medical association were true doctors. So lodges were shut down. Similarly the state has made it illegal for health insurance companies to compete across state lines, so the companies within a US state have a virtual monopoly.

If you make inheritance prohibitively expensive, where's the incentive to save and pass on wealth to the next generation?

If you have a system without inheritance, everyone would just act like baby-boomers and consume as much as humanly possible.

wealthy people like to save their money
poor people like to spend their money
so redistributing wealth to the poor (within reason) is better for growing the economy

heres some memegraphs

Actually it does take those expenses into account. I live in a state where the average housing cost is the lowest in the country. I've carefully calculated it out. 1 million dollars is the bare minimum to last 30 years. I'm on track to hit it, but in reality I will probably be well over 1 million. I'm also discounting my eventual inheritance and the life insurance payout from when my parents die, since it is not an eventuality I like to consider and planning around it seems morbid to me.

Why is your metric of wealth/productivity/success increases in consumption of resources?

there's a difference in making it specifically about relieving the rich to have them create jobs for the poor, and just relief in general. MOST of the tax burden is already on the rich, so it makes sense that most of the relief would be on them. And there's also a difference between saying tax cuts will stimulate the economy (actually more of a keynsian idea, the idea that the point of it is to get the rich to spend money which then gets those people to spend money, and the money just circulates, and that is a net good for the economy) and saying that tax cuts allow us to allocate resources more effeciently

If they move to another country, they lost their opportunity to make money in the country that made them rich in the first place.

When a person gets rich, they have the drive to stay rich. Taxing their capital gains and income doens't change the fact that they are still getting richer. It just lowers the rate at which they can get richer. Its not supposed to make you poor or make you stay same.

In the most fundamental sense you spending your money enables other people.

You're just stupid, the "bare minimum" (based on your teenage evaluation) to see you over fluctuations of decades in the market and the economy while ignoring the fact shit really starts to get expensive in terms of medical bills when you get old (the exact time even based on your ridiculous claims you will run out of money).

I can't believe I am even having this conversation, good luck to you kiddo, I guarantee you will be one of the ones of social security unless you get slightly more clued up,.

>If they move to another country, they lost their opportunity to make money in the country that made them rich in the first place.
And yet you still have the athletes coming to America, despite all the fame and glory they had in their home country, despite being a hero to millions even, they come to America because they'd rather be multimillionaires. That's a fact. The minute a better opportunity arises they leave to take it.

Lol so clueless.

They're not leaving their host country for America due to them being millioniares and the government is taxing their capital gains..

The idea of Trickle down was that if you give wealthy tax cuts they will store their money in a bank.
The bank then has the abilities to take more risks in making more loan investments for lower class people to try and start business of their own. You could also say that the rich will build more buildings for their business and hire more people also if they have more to spend to expand their business empire.

However due to over seas banking and currently there being a real lack of competition in the business market due to oversized business empires the weak can barely contend with the already hyper built competitors.

> Things that totally happened

Any company that did this would be putting out a glowing press release, and Trump would have boasted about his tax breaks causing raises.

Link your company press release.

A rich person or company who saves X money will put it in a bank.

That bank is probably on some shady tax haven (Malta, Caymans, etc..) or nominally low tax country (ireland for example).

Cheers, it makes more sense now. I hear your ISPs are pretty much state monopolies too?

t. person who doesn't follow politics

Not him, but have you ever worked for a small/medium sized business?

Tax and wage laws have a major impacts on smaller businesses.

>da rich peopo just sit on der money and leave it rotting in a bank as it lovses value every year from inflation

>be individual that makes >$1M
>start a corporation with just me and get around your retarded capital and income tax

Supply Side*

Well, no reason to train workers if you never expect to use them.

The panama papers clearly shows the super rich are willing to do just that to avoid paying taxes.

It's simply smart to maximize your wealth through circumvention. Its what I would do within a legally defined framework.

is Kansas a good example for why supply side is a mistake? Or that they didnt supply side hard enough?

All I know is that they fucked up

>have $1 million
>put it in a basic index that makes you 10% a year
>live off the $100k you make and just put the rest you dont use back in so it keeps growing

why are commies so retarded

>yet pretty much the entirety of the poor person's wealth is the result of the rich man's investment into the economy
It's usually a corporation and not a person. And poor people do work for small businesses too. Not to mention that they often initiate those businesses.

Other than that I completely agree with your post.

>It's usually a corporation and not a person

yeah because corporations come out of thin air and run on magic

They are run by people on a salary. Private capital is not the driving force behind investments, let alone economic growth.

>Does trickle-down work?

With about the same rate and reasons as communism.
And yes, wealth is amassed at the top, not "trickles down". If wealth is needed to "trickledown", rich faggots will rather "hire" some illegals or outsource the production.

Ironically, people whose country produces Stingers, now bitch about people who used those Stingers.
9/11 was a day of divine retribution to eternal amerishart.

>low taxes stimulate spending among the wealthy,

It doesn't. Especially if there are tax havens. And even when it does, it's, usually, a luxury industries and, in overall, it's fucking breadcrumbs for the nation.

>and that active investment process creates jobs and wealth that help everyone

Not an argument. Communists and Nazis both "created jobs" too. Not to mention that in both cases it actually was for everyone, since it was in the interests of the nation.
"Trickle down economics" is a wrong term though. I prefer the term "golden shower economics". Spoiler: that shower is not made of gold, hehe.

> I think those at the top got like 1% raises at most, but I got a 25% raise and a coworker friend of mine got a 40% raise

t. Wagecuck being proud that his 1000-2000 buck payment has extra 200 bucks while the top ones have an increase 10-100 times bigger.

>Without the capital of the rich the company never would have been founded and those poor people would have no jobs in the first place.

How to spot wageslave.

> where's the incentive to save and pass on wealth to the next generation?

Gates and Buffett are both leaving 99% of their wealth to charity and leaving relatively little for their children.

I doubt inheritance taxes would have made them less likely to work hard and create wealth.

of course not.
you don't need catchy names and relatable stories for economics policy that actually works.
same deal with austerity.

Maybe a few centuries ago. In the modern day, however, the rich have absolutely no obligation to support the development of the countries that pay them because they can just move to somewhere else once that country becomes too poor for their tastes. This is why isolationist monarchies like Bhutan are the only good countries left in the world.

Hard to know since there is already some inheritance tax regime. My point was specifically in reference to your proposal to end inheritance altogether.

I think it logically follows that if you were to end generational wealth-transfer, the decisions of individuals about how much they're willing to work and sacrifice would change dramatically.

Well from my point of view the government is evil.

Hello NEET

...

I don't know any economy theories or something, but it goes like this
certain poor people are resourceful enough that they might set up their families on the road to social advancement, but majority is too stupid for it (and that's why they're poor in the first place)
however, the important bit is that, in economy that relies on people working and consuming a lot of shit, people's living condition will inevitably go up because rich people are greedy and will want to earn more, but that involves paying more for new workers, new specialist, new majors... if the working class wasn't nannied by government and unions they'd have to learn how not to get shafted by corporations and people in general.
poor and rich divide isn't very important, it's that one uses and supports the other, both sides gain
obviously though, with Jews and muh free trade faggots this is all a pipe dream

Umm sweaty poor people are retards because they live in shitty environments
If we try to give better opportunity for them to see other than continuing being poor it’ll be better

Poor retards aren't retards because they're poor, they're poor because they're retards.

this falls apart very easily
>primal tribes
>no culture, no outside interference
>poor people still happen

What a simplistic and flawed ways of viewing things dear,does sucking up to well off people cover up for your pee pee insecurity sweetheart
I mean in current society,i guess mine is a bit too unrefined itself but saying that poor people are automatically dumb and giving a higher standard of living to them wouldnt be beneficiary is disingeneous

> they'd have to learn how not to get shafted by corporations and people in general
that sounds nice to you, but corporations have infinitely more resources to put into extortion than the serfs do. there's no way to avoid getting shafted when your masters can rewrite the law of the land by waving a fat wad of cash under a politician's nose.

>your masters can rewrite the law
i said no jews

It technically works, but you wouldn't notice it.

Competition ultimately leads to a lower cost for the most profit; whether your're a laborer looking for a job, or an employer trying to hire people, you're competing for more money. And because there's wealth inequality, there's incentive to get rich.

The people who get rich won't necessarily spend like a rich person.
Just because they have 10 times more money than you, doesn't mean that they spend ten times more on food, or ten times on toilet paper, or ten times on cat litter; they buy as much as you do for relatively similar price. Poor people will spend money like they're rich, and rich people will spend like they're poor; this is why they have the money they do; they use it wisely.

If a rich person has a billion dollars, it doesn't mean that he has money that could be spent to feed poor people; the market's supply of pizza, for example, exists as per the demand; and the supply exists as is cost effective. Even if the rich person distributed his money, there still won't be enough pizzas, because there's flour is too expensive; the flour is expensive, because farming and transportation requires precious oil which is getting too expensive. And if wealth was distributed, then oil would rise in price again.
Wealth doesn't actually trickle down; but jobs do, and infrastructure that rich people provide.