June 11, 2015 by Chris Kite
Since the Reagan years, we’ve been hearing about this completely unexplainable miracle phenomena where if you lower taxes on the rich, there will be more jobs, and there will be more tax revenue.
I understand their argument as to why this is true, but it is false. The rich aren’t going to spend much more money if they are taxed less. They already have more than they need. They are not going to suddenly start hiring people unless there is a need to. Hiring isn’t based on profits. Hiring is based on demand for products and services. If people are buying more of the products or services, there is demand, and the company will hire.
What we’re seeing is that the miracle of trickle down economics does not exist. That’s no surprise to those of us that never bought into the bogus notion. The proof is in the fact that conservative states all over the country (Wisconsin, Kansas, Alaska, Pennsylvania, Louisiana, and Alabama are some) are running into budget shortfalls. It would appear that perhaps the ability to balance a budget by cutting taxes is just a silly as it sounds.
Meanwhile, up in Minnesota, taxes on the wealthy were raised (as was the minimum wage) and they are looking at a $1.9B budget surplus.
Perhaps George HW Bush said it best when he called trickle down economics “voodoo economics!”