The “news” industry has rediscovered an old slur: Trickle-Down Economics (TDE). Catherine Rampell is on the editorial page
Sidebar: We know we made fun of Kevin Williamson for stooping to take on Catherine but she is just part of this post.
She is saying things like this:
Of course, Republican lawmakers and administration officials promise that these corporate giveaways will really, truly, honest-to-goodness primarily benefit us regular humans, especially humans in the middle class.
That’s because, they claim, corporate tax cuts will unleash a wave of business investment and therefore economic growth, most of which will trickle down to the little people-people.
Well, heroes one thing Kevin Hassett, The Donald’s chair of the Council of Economic Advisors, said (from Larry Kudlow):
“Economists who have studied the effects of taxes over time have discovered a consensus,” he said. “Lower marginal tax rates and a broader base increase the rate of economic growth and well-being.”
Here is Kevin on CNBC:
The new report from Hassett, out Monday morning, projects that reducing the corporate tax rate to 20 percent will result in a windfall for U.S. workers. He predicted average U.S. household income would increase at least $4,000 a year but could rise as much as $9,000 annually.
It is an interesting question of the incidence of corporate taxes. What percentage falls on owners and workers? Catherine is suggesting that 100 percent falls on owners. That seems unlikely. It seems even more unlikely that the owners will decide to put all that money in their mattresses.
Taking up almost all of the above the fold back page of the 11/18 La Crosse Tribune is an associated press (AP) story (yes it is an editorial pretending it is a news story) that we can’t find on the Internet. The headline is: Giving Trickle-Down Another Try. Here the AP is going for a triple slur. They get Reagan, Trump, economics all in one headline. It gives the Tax Policy Center the highly coveted “nonpartisan” designation. [Perhaps they are just wrong and not partisan.] It blames the W’s 2001-3 tax cuts for the Great Recession and notes that W’s expansion was one of the weakest. Hmmm, which President, we wonder, had the weakest?
If you would like a more detailed discussion of the slur check out Thomas Sowell from 2012.
Catherine and the AP seem desperate to make slurs and throw stuff against the wall and hope that something sticks. To get the success of the Reagan tax cuts from The Donald’s tax cuts we need to couple it with deregulation and good central banking. There seems to be good news on deregulation. The Donald doesn’t fill us with confidence and we worry about trade but he is our best chance.