Trickle-Down Theory is a Lie (Script & Sources)

Good morning, bad news: after 40 years of Ronald Reagan’s trickle-down theory tax cuts, the richest families in America now pay a lower overall tax rate than the middle class, while taxes on the bottom 20% are scheduled to go UP to cover the money that billionaires aren’t paying.

At this point, it’s not even remotely controversial to point out that trickle-down theory is intentionally designed to strip wealth from the middle class and hand it directly to the ultra-wealthy. So let’s talk about why trickle-down theory not only doesn’t work, but accomplishes exactly the opposite of what it claims to. 

Obviously the story starts with Ronald Reagan. Reagan came into office in the early 1980s at the tail end of an economic crisis caused by Richard Nixon. Between 1981 and 1986, Reagan cut the marginal tax rate for the richest Americans from 70% to 28%, along with massive cuts to basically every tax that rich people pay more of, like estate and business taxes. 

And the theory was that that giving money to the most successful people, will lead to even greater success, which leads to even greater economic growth because the ultra-wealthy will invest that money in hiring more people, expanding their business, creating more jobs, raising wages, and so on. 

But here’s the thing. They don’t. When billionaire business owners get tax cuts, they use that money to do three things: buy their own stock to artificially raise it’s price, bribe congress to pass laws that make sure they pay their workers as little as possible, and automate or outsource their workforce.

And the effect this has on the economy is devastating. The fact is, there is zero evidence that trickle-down theory leads to anything except greater wealth inequality, and every single economic boost that is attributed to trickle-down theory, is very clearly the result of a different short-term economic policy, like cutting interest rates or increasing government spending, or in the case of Ronald Reagan, tripling the national debt. 

Trickle-down theory does not lead to economic growth, higher wages, or job creation. Period. The highest economic growth we’ve seen directly correlates to periods when the top tax rate was over 90% in the 1950s, which was also the last time that the true middle class was thriving, not just surviving. The majority of the growth we’ve seen in the last 4 decades has just been the result of putting the country in debt to pay multi-millionaires and billionaires to artificially inflate the stock market, and dumping that debt on the middle-class’s children’s children, because they’re the only ones left to pay it. 

Your livelihood is being stolen from you on the basis of a long-disproved lie that’s being perpetrated by both political parties because they directly benefit from that lie too. So let’s talk about what’s happening right now, in part 3.

Let’s be honest, if you’re looking at the economic landscape and the unbelievable wealth inequality that’s literally starving out the middle class and making it impossible for an entire generation to start a family or buy a home or pay for healthcare, and your solution is to give the richest 1% even more money, then you’re actively taking part in what can only be described as a systematic attack on an entire population on the basis of class, especially because true class mobility is no longer possible like it was during the 20th century, and the small handful of exceptions that critics like to trot out, like Oprah or JK Rowling, are exceptions that prove the rule.

You will never be a billionaire, no matter how hard you work, and wealth gurus who make their money by telling you that everyone else is lazy and that you can make it by working smarter, are preying on the hopelessness created by this systematic class divide, by making you feel like you can overcome it through a sense of superiority. But you can’t.

And it should be obvious by now, that the only way that the ultra-wealthy can continue stealing your money and maintaining power, is by convincing the very people they’re stealing from that they can too, at which point their frustrations are directed, not at the ultra-wealthy stealing their livelihood, but at marginalized groups who are also fighting for that same livelihood in a system that forces people to compete for scraps. Obviously racism, sexism, homophobia, police brutality, ableism, religion, education, language, and identity play a central role, but class is a dominating issue! And so while the poor and middle-class are fighting amongst themselves based on skin color or politics, billionaires are robbing us blind, and trickle-down theory is the lie they’re using to do it.