Trickle Down Theory

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Trickle Down Theory

An informal term for a macroeconomic theory that a government can best promote growth by providing incentives for persons to produce goods and services. The primary way a government does this is by maintaining low tax rates so that investors and entrepreneurs may invest their money in production. Maintaining low tax rates on the wealthy is one of the most important and controversial aspects of trickle down theory; the theory states that if well off persons have the capital available to produce goods and services, they create jobs and thereby grow the economy. In other words, the growth "trickles down" from the wealthy to the remainder of the economy. Critics contend that this does not happen in reality and that the wealthy are more likely to keep, rather than invest, their money. In the United States, trickle down theory was crucial to the economic policy of the Ronald Reagan administration. See also: Keynesian economics, Monetarism, Thatcherism.
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The failure of trickle-down economics to fairly distribute wealth and encourage inclusive growth, the damaging impact on the planet of the unchecked pursuit of profit, and the banking scandals of miss-selling and rate-fixing of the past decade have provided the context for the emergence of a new narrative.
Think Santa Claus, the tooth fairy and trickle-down economics.)
This reflects the underlying basis of trickle-down economics entrenched in WB's mindset, where since the 1960s it was assumed that by increasing national output would naturally lead to denting poverty, which has not happened in the last 30 years, and in the words of Nobel laureate Joseph Stiglitz would have been a good phenomena if it were to happen, as a lot of public funds investment took place in safeguarding and nourishing the income pie of the rich.
Its fundamental assumption is that broadly speaking, the system works fine: Trickle-down economics brings prosperity, and to the extent things could be better, such as wages, the answer is patience and more of the same.
"I'm not a believer in trickle-down economics and trickle-down taxation," Cuban said.
As for Mr Kuria, the coming into effect of this amendment will reinvent him as the man we all knew before he ventured into politics: An economist with a good grasp of what turns the wheels of the economy and, indeed knows that when we talk of trickle-down economics, the government holds the ace in ensuring that the people's welfare is well taken off.
"Once you realize that trickle-down economics does not work, you will see the excessive tax cuts for the rich as what they are - a simple upward redistribution of income, rather than a way to make all of us richer, as we were told."
To folks riding a decrepit subway to work, for the men and women who aren't interested in working for a tech giant, and for commuters who face traffic nightmares as part of everyday life, trickle-down economics doesn't compute.
"We believe that misguided tax and other policies like 'trickle-down economics,' fiscal mismanagement from both parties, natural disasters like Hurricane Sandy and the previous recession all combined to hold back economic growth in New Jersey," said Reynertson.
If Democrats want to win big in November, they must do more than just renounce trickle-down economics. They need to replace it.
Should you have wondered how much Rosen trusts in the principles of trickle-down economics, now you know.