Independent Investigations
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IN CASE YOU WERE WONDERING (2016 EDITION) – REASON 9 -THE RICH GET RICHER


 

This is the 3rd in a series of blogs listing reasons why I will not vote for Donald Trump.  This one probably isn’t something that most think about.  It involves Trumps latching on to the tired old fiscal theory that has come to be known as “Trickle Down Economics”.  I will keep this one short, since the vast majority of us are definitely not economists, and the topic may not create any interest.

Image result for Trickle Down Cartoons

First of all, “trickle-down” is not a term used by most economists.  It is a purely political term.  Basically, this economic theory suggests that giving large tax breaks to the rich will give them even more money than they already have.  This theory depends upon those who are getting the tax break to create more jobs with their extra money which then boosts the economy. A growing economy would be good for the middle class.  In essence, the money “trickles down” from the rich to the middle class.

The most recent experiment in the “cut taxes for the rich” crowd involved our most recent Republican President, George W. Bush.  As a result of the Bush-era tax cuts, the highest-income earners paid the lowest rates in U.S. history and that net job growth during the Bush administration was zero.   The idea that the rich would create jobs with their extra money definitely fell flat on its face.

The real question is “what are those that receive the tax breaks doing with their extra money”?   Generally speaking,  money from these tax breaks usually ends up being hoarded in overseas tax shelters and other “safe havens”, or if it is invested, it is typically in the equities market where the profits are taxed at a mere 15%-20% because they are considered Capital Gains.

The tax plan that Donald Trump has revealed is basically the same fiscal policy that has proven to provide very little job growth, exploded the debt, stymied economic growth, and increased the gap between the very rich and the middle class.  Since I presume that most of those who read this would not be classified as belonging to the “very rich” crowd, a vote for Trump is a vote that, at its most fundamental form, is a vote against our own economic interests.    In this fiscal environment, it makes no sense for most of us.

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