Here’s one to file under No Shit, Sherlock: “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 unemployment. First, we use a new encompassing measure of taxes on the rich to identify instances of major reductions in tax progressivity. … 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.” As Charles P Pierce put it: “[N]o, cutting taxes for the very wealthy does not help the rest of us, neither does it ‘trickle down,’ and neither does it lift all boats or whatever other metaphor has been used to camouflage the fact that supply-side economics was a mechanism for shoving the nation’s wealth upwards. This cotton-headed legacy of the Reagan Era was precisely what David Stockman (‘a Trojan horse to bring down the top rate’) and George H.W. Bush (‘voodoo economics’) said it was at the time.” But alas, this is not some historical failure — Morrison is committed to another huge tranche of this stupidity in coming budgets.
30 December 2020