Why is trickle-down economics still a thing?
Trump released his tax plan the other day. It looks like it was thrown together in about 10 minutes. Simplistic goals like “boost the economy and create millions of jobs” do not inspire confidence. How many more jobs do we need really? I’ve been trying to get one for months and there are always tons of options. Jobs aplenty! Fast-paced environments, self-starters, working in teams! They all require years of experience too so you know they’re extra good.
I haven’t been able to get one but I suspect that’s more a personal failing on my part.
I mean, how do you apply nine years of English teaching in Japan to any kind of job in this country? It’s a rather niche’ experience set. Maybe people think I’m making it up to cover for the fact that I was in prison. Or maybe since my last job was as a Democratic party operative the statistics aren’t on my side in this state. It is rough being unemployed in this day and age but I’m not here to talk about that. I could go on at length. And will probably in the future.
What I actually want to know is why Republicans still think that trickle-down economics is a good idea. They always say that it will spur growth because businesses and rich people will have more money to invest. Except it didn’t work with the Bush tax cuts last time and it’s not working now with Kansas. I am a fan of third time’s a charm as much as the next guy but there are some serious flaws in that thinking. Not just because Reagan tried it too.
The significant reinvestment Republicans expect would have to provide an equally significant return. It would have to beat what could be gained by giving it to a broker and not worrying about it again. That is the part that a lot of people seem to not consider.
A restaurant isn’t likely to hire more people just because they get to keep more of their income. Will the extra servers have enough customers to support the extra wages? What about increased food costs? The price of expanding the dining room or setting up a new location? Can the town even provide the demand needed? We’re talking small towns as well as big cities here. Slash the taxes across the country and you’re going to have varied results.
Might need more than a single page to explain it all. Just saying.
I am probably missing a bunch of other serious concerns worth mentioning because I’ve never run a restaurant. And that’s just one example of a business. The bottom line is, yes maybe expansion would provide more income than investing in the market. However, will it be enough a difference to warrant the costs and effort needed for said expansion? Time and again, on a large scale, the answer is no.
Another thing, stop promising we can grow the economy into paying for the cuts. China focused on growth over all else and that’s how they got ghost cities. We probably won’t pour money into construction like they did but we’ll find something. Coal maybe.
Or Wall Street. Definitely Wall Street.
The problem is this style of tax cut doesn’t incentivize the aspect of human nature that is needed for it to survive. Altruism. Business types are fond of saying “time is money”. In order for trickle-down to work as intended, a lot of rich people are going to have to give up their free time. I don’t own a business but I imagine if it was so easy to run and expand one then everyone would do it. Trump’s tax plan depends on folks rolling up their sleeves in order to foster growth at their own expense.
That doesn’t ever happen in Reality America. Maybe in Dream America but certainly not to the scale needed in the real world. Rich folk will hoard their money in lower taxed avenues. Trickle down gives them the option of making a lot for no effort or making a little bit more for high effort. That’s a no brainer of a choice. Throw in things like eliminating the Alternative Minimum tax and the Estate tax and the top of the economic food chain will get massive amounts of money for doing nothing.