![]() ![]() The issue matters especially to the United States, an economy with a level of income inequality, among the highest in the world, more typical of developing economies than of advanced economies. This is an important topic and one that can have a substantial impact on the future growth prospects for an economy. ![]() Either one is in the camp that believes that the economy is automatically better off from tax changes that benefit the wealthy, or one is in the camp that dismisses the whole thing as voodoo economics. Unfortunately, any discussion on the topic quickly breaks down into what is often a political debate and not a discussion about the economics of income distribution. Tax cuts in 20 during George W Bush’s administration did not juice growth, nor did any Obama era cuts. The argument is that trickle-down economics will somehow magically start working to bolster growth, even though there is no evidence over the past 20 years that this has been the case. Does the trickle-down part of supply-side economics ever work? In a Financial Times article last month, Rana Foroohar pointed out that the recent track record of trickle-down economics may not be terribly impressive: ![]()
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