TheDodoVille
A group at the London School of Economics has studied 50 years of massive tax cuts that destroy progressivity and this is what they conclude:
This paper uses data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and un- employment. First, we use a new encompassing measure of taxes on the rich to identify in- stances of major reductions in tax progressivity. Then, we look at the causal effect of these episodes on economic outcomes by applying a nonparametric generalization of the differ- ence-in-differences indicator that implements Mahalanobis matching in panel data analysis. We find that major reforms reducing taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income. The effect remains stable in the medium term. In contrast, such reforms do not have any significant effect on economic growth and unemployment.
So.
Not only do voodoo economics not trickle down, they also do not make things better economically.
And yet those that have been screwed the worst keep voting against their own best interests.
This is a topic we've been discussing around here recently (see, for example, the comments here) and it is something we will return to in the future.
This paper uses data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and un- employment. First, we use a new encompassing measure of taxes on the rich to identify in- stances of major reductions in tax progressivity. Then, we look at the causal effect of these episodes on economic outcomes by applying a nonparametric generalization of the differ- ence-in-differences indicator that implements Mahalanobis matching in panel data analysis. We find that major reforms reducing taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income. The effect remains stable in the medium term. In contrast, such reforms do not have any significant effect on economic growth and unemployment.
So.
Not only do voodoo economics not trickle down, they also do not make things better economically.
And yet those that have been screwed the worst keep voting against their own best interests.
This is a topic we've been discussing around here recently (see, for example, the comments here) and it is something we will return to in the future.
.
2 comments:
Yup. It’s what most people know but having it in confirmed through research is great. Nice to be able to refer to something when it comes up next. Somehow the rich folks have us convinced they don’t make enough money and we make too much. That must change.
The problem has always been the fact that the plutocracy has the means to capture the system and make it work, wherever needs be across the board, in their own vested interests.
it is no accident that virtually no outsider ever figures out how fiat currency is created, issued, or controlled.
We all spend most of our waking lives chasing around for something that we hardly understand at all.
What worries me most, though, is that the present Bretton Woods debt-based fiat system based on the U$ dollar is collapsing under the weight of DEBT and hence very close to its end; which means we are due for a transition of epochal significance no matter who is president.
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