Supply-side economics, often referred to as trickle-down economics, asserts among other things that tax cuts for the wealthy will increase aggregate investment, spurring economic growth with concomitant job creation. Over three decades of empirical evidence suggests this theory doesn’t work. The following seven graphs depict the theory’s failure by comparing time periods where supply-side economics prevailed (1980s and 2000s supply-side eras) with a non-supply-side era (1990s).
Do tax cuts lead to robust economic growth and greater prosperity for all? According to trickle down economics the answer is in the affirmative. Trickle down economics, often identified with supply side economics, represents the idea that tax cuts or … Continue reading →
In some quarters it’s fashionable to blame President George W. Bush for many of today’s ills. I prefer not to blame the former President for some of the issues we face but instead look at his years as a natural … Continue reading →
Do lower top marginal tax rates create more jobs? The following evidence does not support that proposition. Here’s a graph of historical top marginal tax rates (red line, scale on the right axis) and unemployment rates (blue line, scale on … Continue reading →
Another Nail in Coffin of Supply-Side, Trickle-Down Economics Conventional wisdom suggests that States without income taxes will experience greater economic growth than States with taxes. This conventional wisdom stems from supply-side, trickle-down economics. Conventional wisdom and supply-side economics are wrong, … Continue reading →
My ‘robotic’ news filters have identified a huge number of articles arguing for lowering corporate tax rates, ostensibly to grow the economy and create jobs. Let me first say I am not opposed to corporate profits. A good case can … Continue reading →
The Laffer Curve The “Laffer Curve” is the Holy Grail of supply-side economics and conservative ideology opposed to tax increases. Graphically the Laffer Curve can be depicted in the following manner. It basically says that increases in the tax rate … Continue reading →