For almost a hundred years, economists have argued that tax cuts for the richest should have a stimulating effect on the economy and that this should benefit the less wealthy through what they call trickle-down economics. A recent major research report shows clearly that this is not true. With the Trickle-down measuring cup, you can check for yourself who is right.
Trickle-down economics is a theory that states that benefits for the wealthy trickle down to everyone else. The benefits in question are tax cuts for companies, high wages and capital income.
Trickle-down economics considers investors, savers and business owners to be the real drivers of growth, and imagines that these operators will use extra profit from tax cuts to expand their businesses: Investors will buy more companies or stocks. The banks will increase lending. Owners will invest in their business and hire more workers. In total the results of these measures will trickle down to the workers, who in turn will use their wages to drive demand for goods, and thus economic growth is achieved.
After nearly a century of various attempts to use trickle-down economics to stimulate economic growth, the results are consistently the same. Instead of using the surplus from tax cuts to hire more workers or raise wages, the wealthy always end up spending the money on themselves – either by buying various forms of property or paying for climate-unfriendly extreme consumption (private jets, hunting lodges with square meters of outdoor areas with heating cables, etc.).
Measuring cup of 30 ml
Sit down outside the stock exchange offices or a snobbish restaurant and place the trickle-down measuring cup on the ground in front of you. Feel free to use the sitting mat from the first aid kit to avoid discomfort or catching a cold. Count the number of people who pass you during the period you have chosen to measure – e.g. eight hours. Count the money that has trickled into the cup and calculate what percentage this amount is of the total income of all passing people in the given period. Be prepared for a disappointing result.