Trickle-down economics

"Trickle-down economics" also called trickle-down theory, refers to the economic proposition that taxes on businesses and the wealthy in society should be reduced as a means to stimulate business investment in the short term and benefit society at large in the long term. The term "trickle-down" originated as a joke by humorist Will Rogers and today is often used to criticize economic policies that favor the wealthy or privileged while being framed as good for the average citizen.

Quotes

• This is not the time for trickle-down solutions. We know that when you lift from the bottom, everybody rises.
  • William Barber II and Liz Theoharis, letter to President Donald Trump, Vice President Mike Pence and Members of the 116th Congress on the 2020 coronavirus pandemic, Poverty Amidst Pandemic: A Moral Response to COVID-19 (March 19, 2020), Poor People's Campaign: A National Call for a Moral Revival.

• Tonight -- tonight, I want to talk about the future of possibilities that we can build together -- a future where the days of trickle-down economics are over and the wealthy and the biggest corporations no longer get the -- all the tax breaks. And, by the way, I understand corporations. I come from a state that has more corporations invested than every one of your states in the state -- the United States combined. And I represented it for 36 years. I'm not anti-corporation. But I grew up in a home where trickle-down economics didn't put much on my dad's kitchen table. That's why I'm determined to turn things around so the middle class does well. When they do well, the poor have a way up and the wealthy still do very well. We all do well. And there's more to do to make sure you're feeling the benefits of all we're doing
  • Joe Biden, 2024 State of the Union Address, 7 March 2024

• Now, I don't have all the answers, but I do know the old ways don't work. Trickledown economics has sure failed. And big bureaucracies, both private and public, they've failed too. That's why we need a new approach to government, a government that offers more empowerment and less entitlement. More choices for young people in the schools they attend- in the public schools they attend. And more choices for the elderly and for people with disabilities and the long-term care they receive. A government that is leaner, not meaner; a government that expands opportunity, not bureaucracy; a government that understands that jobs must come from growth in a vibrant and vital system of free enterprise.
  • Bill Clinton, "Address Accepting the Presidential Nomination at the Democratic National Convention in New York," July 16, 1992. Online by Gerhard Peters and John T. Woolley, The American Presidency Project.

• Along came the Republicans, trickle-down economics — one of the worst ideas since snake oil — was put back into place. And we ended up with the great recession. President Obama had to rescue the economy. And I don’t think he gets the credit he deserves for doing that.
  • Hillary Clinton, at the Democratic Presidential Debate in Miami, transcript by The New York Times. (March 9, 2016)

• The kind of plan that Donald (Trump) has put forth would be trickle-down economics all over again. In fact, it would be the most extreme version, the biggest tax cuts for the top percent of the people in this country than we've ever had. I call it trumped-up trickle-down, because that's exactly what it would be. That is not how we grow the economy.
  • Hillary Clinton, first presidential debate, Transcript, Washington Post (September 26, 2016)

• We've looked at your [Trump's] tax proposals. I don't see changes in the corporate tax rates or the kinds of proposals you're referring to that would cause the repatriation, bringing back of money that's stranded overseas. I happen to support that. I happen to support that in a way that will actually work to our benefit. But when I look at what you have proposed, you have what is called now the Trump loophole, because it would so advantage you and the business you do. ... Trumped-up trickle-down. Trickle-down did not work. It got us into the mess we were in, in 2008 and 2009. Slashing taxes on the wealthy hasn't worked. And a lot of really smart, wealthy people know that. And they are saying, hey, we need to do more to make the contributions we should be making to rebuild the middle class. I don't think top-down works in America. I think building the middle class, investing in the middle class, making college debt-free so more young people can get their education, helping people refinance their debt from college at a lower rate. Those are the kinds of things that will really boost the economy. Broad-based, inclusive growth is what we need in America, not more advantages for people at the very top.
  • Hillary Clinton, first presidential debate, Transcript, Washington Post (September 26, 2016)

• We justify the greater and greater accumulation of capital because we believe that therefrom flows the support of all science, art, learning, and the charities which minister to the humanities of life, all carrying their beneficent effects to the people as a whole.
  • Calvin Coolidge, Speech at Amherst College alumni dinner, New York, November 27, 1920

• Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world. This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and in the sacralized workings of the prevailing economic system.
  • Pope Francis, "The Joy of the Gospel" (2013), Section 54

• As it turns out, making rich people richer doesn't make the rest of us richer. Nor does it stimulate economic growth, which is the sole justification of supply-side economics. In fact, quite the opposite is true: since the onset of neoliberalism, the rich countries of the OECD have seen per capita growth rates fall from an average of 3.5 per cent during the 1960s and 1970s down to an average of 2 per cent during the 1980s and 1990s As the numbers show, neoliberalism has failed as a tool for economic development - but it has worked brilliantly as a tool for restoring power to the wealthy elite.
  • Jason Hickel, The Divide: A Brief Guide to Global Inequality and its Solutions, 2018, p. 138

• This election was lost four and five and six years ago not this year. They dident start thinking of the old common fellow till just as they started out on the election tour. The money was all appropriated for the top in the hopes that it would trickle down to the needy. Mr. Hoover was an engineer. He knew that water trickled down. Put it uphill and let it go and it will reach the dryest little spot. But he dident know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night anyhow. But it will at least have passed through the poor fellow’s hands. They saved the big banks but the little ones went up the flue.
  • Will Rogers, Nationally syndicated column number 518, "And Here’s How It All Happened" (1932), as published in the Tulsa Daily World, 5 December 1932.

• In short, the sequence of payments is directly the opposite of what is assumed by those who talk about a “trickle-down” theory. The workers must be paid first and then the profits flow upward later— if at all.
  • Thomas Sowell, Basic Economics, 4th ed. (2010), Ch. 23. Myths about Market

• We're the richest country, but if you're living in a shed
  When does the economy trickle down
  Through the corrugated roof above your head?
  • "Weird Al" Yankovic, "Deja Vu (But Worse)," 28 June 2024

See also

• Bailouts
• Capitalism
• Corporate welfare
• Corporatocracy
• Greed
• Living wage
• Plutocracy
• Prosperity theology
• Redistribution of income and wealth
• Social Democracy
• Social inequality
• Social injustice
• Social justice
• Wage slavery