Quote:
Originally Posted by Willravel
No, they didn't work. Trickle-down economics is not something any serious economist would espouse as being helpful for the vast majority of people.
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The Bush tax cuts worked. When I got a $600 check related to the initial tax cut, I used it and some of my money and reinvested in my small business. I was able to buy a higher speed copier/printer/scanner. As a result an employee I had at the time was able to learn and devote more time to higher level customer service work. My customers got better service, my business grew, my employee learned new skills, and I paid him more money.
The above is anecdotal and can be dismissed very easily, but anyone who has actually run a business knows how, "trickle-down" works. But everyone else can simply look at the logic in the numbers:
If a business owner has a legitimate after tax profit margin of 10%, that means 90% went to benefit someone else - or if the business grosses $1 million, $900,000 benefits others. If the business owner doubles in gross to $2 million, $1.8 goes to the benefit of others.
Often in order for a person to double their gross they have to reinvest in the business. So, if out of the $100,000 net to the business owner consumes the money - there is no reinvestment. If a tax cut allow for reinvestment, and business growth for every $1 of that growth $.90 "trickles down", up, around, or some where other than to the business owner.
If the business owner consumes the tax cut, not reinvesting the money still benefits others. If the business owner saves the tax cut, it goes into a bank and the bank lends the money to others, still benefiting others.
No matter how you logically look at "trickle down" works. It takes more than people repeatedly saying it does not. Every time I encounter a post like the above, I can eventually present a supply side argument where there is no meaningful response.