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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To the extent that economic incentives matter at all (and it is the cornerstone of trickle-down theory that they do), higher taxes on top earners would push some people away from the competition for the most glamorous lines of work, and into more productive lines of work.
The results, based as they are on the information collected from two developing countries, confirm the a priori expectation about the trickle-down theory of economic growth.
That 10 percent are the green-with-envy, people, and the trickle-down theory will work well enough to win the allegiance of 50 percent.
They' will benefit through the trickle-down theory.
Chapter 6, which opens Section 3, is a bold attempt at using the trickle-down theory of fashion to explain gender differences.
Would the trickle-down theory prevail, or would decisions be based on a preferential option for the poor?
It is fashionable in some intellectual circles to deride the trickle-down theory, technological change, and the Green Revolution as tools of the haves to exploit the have-nots.
But sections that could give discomfort to Thatcherite Conservatives are the advocacy of a bill of rights; the assertion of an "intimate relationship" between "political liberation" and "salvation"; the questioning of the trickle-down theory in economics; and the rejection of an "underclass" as a "price worth paying" for advantages to the majority.