Trickle Down Theory of Economics – doesn’t work
The simple-minded idea that cutting taxes on the "rich" suffices to raise the standard of living of all concerned does not have a great track record. Name any economist, outside of an insane asylum, who had ever said any such thing.
In the US:
The richest 1 percent now owns more of the country’s wealth than at any time in the past 50 years.
The wealthiest 1 percent of American households own 40 percent of the country's wealth, according to a new paper by economist Edward N. Wolff. That share is higher than it has been at any point since at least 1962, according to Wolff's data, which comes from the federal Survey of Consumer Finances.
From 2013, the share of wealth owned by the 1 percent shot up by nearly three percentage points. Wealth owned by the bottom 90 percent, meanwhile, fell over the same period. Today, the top 1 percent of households own more wealth than the bottom 90 percent combined. That gap, between the ultrawealthy and everyone else, has only become wider in the past several decades.
In the United States, the distribution of that wealth is even more skewed toward the top than the distribution of income.
The top 20 percent of households actually own a whopping 90 percent of the stuff in America — 90 slices of pie! That's exactly 4½ slices per person, nearly triple their “ideal” share according to Norton and Ariely's survey respondents. Their average net worth? $3 million.
That leaves just 10 percent of the pie for the remaining 80 percent of the populace. The next 20 percent of households (average net worth: $273,600) help themselves to eight slices, while the middle 20 percent ($81,700 net worth, on average) split a measly two slices.
Don't go feeling too sorry for that middle quintile, though — at least they get some pie. The fourth quintile of households gets literally nothing: no pie. But they're still doing better than the bottom 20 percent of households, who are actually in a state of pie debt: Their net worth is underwater, meaning they owe more than they have. Combined, the average net worth of the bottom 40 percent of households is -$8,900.
Now republicans just gave the rich 70% of the new tax cut, increased the deficit, and will claim the government does not have the money for social programs.
· 4 months ago