Talk:Trickle-down economics/Archive 1

Trickledown economics and income inequality

Perhaps this topic could be linked up with income inequality. Two sources to consider that point to trickledown economics not working are as follows:

• Nick Hanauer "banned" speech on TED
• http://www.ted.com/talks/lang/en/richard_wilkinson.html

--JamesPoulson (talk) 16:21, 21 August 2013 (UTC)

Irrelevant and perplexing

Removed the following paragraph:

The idea that the "creative sector of the economy" created employment is rooted in the argument that the United States is successful because it is a free market and capitalist state, and that hatred of communism, and anything associated with the left in general, is a political virtue. Being a political, rather than an economic, term, both sides in the debate demonized the others as being heartless and in league with the forces of greed.

I'm not sure what the thesis of this paragraph is, but it doesn't seem to have much to do with trickle-down theory. It seems to state that supply-side economics is rooted in hatred of the left, while I would think that the converse is much more true. Either way, it's a partisan generalization, and a strawman slur on economic theory that has much more credible arguments against and for. 69.202.77.44 29 June 2005 08:08 (UTC)

== Read Smith before you quote him == and even then, do him justice; and even then, opinions and personal or political interpretations are not encyclopedic - they are political and belong on this discussion page, or on a politics site. I come just short of advocating a complete removal of all the Smith material, except that these sorts of argument have been made for two decades in mainstream politics. It is relevant because of the politics, not because of any genuine intimate connection between Nations and trickle-down. A genuine connection to Kurzets and Keynes is actually less problematic, but that's not how the politics fall.

• "lowest ranks of the people" is completely misrepresented. It has nothing to do with trickle-down. It is in the very next sentence that Smith writes about laborers - not rich people. And it is in this entire chapter that Smith writes about laborers dividing and combining their labor. There is absolutely no "trickling down". Regardless of the merits of trickle-down, chapter one is not about trickle down. Quite the contrary; Nations embraces a free market for everyone and as the lower classes are more numerous, and more motivated by the mother of invention than the liesure class, it is they who will account for the lion's share of a powerful and lively economy. This is not communism, as they are entitled to the fruits of their labor in proportion the quality and quantity of that labor - Smith was a strong advocate of such a meritocracy, and "well governed society" is a reference to that entitlement. Nor is it trickle-down; to abolish apprenticeships would increase the supply of tradesmen, lower prices and improve the economy - but at the unquestionable immediate expense of the upper classes. It is far more accurate to say that Nations is Trickle-up. Because the lower economic classes are more numerous, and because they are exactly those laborers/owners who will benefit the most from abolition of the collusion (fetters) of Smith's day, Nations is actually quite the counter-example to trickle-down. Further more, dividing supply side from demand side is anachronistic. To Smith, supply and demand two faces of the same coin. There will be an increase in laborers (supply) only if there is demand to motivate such. In fact, Smith is one of the most influencial authors to use and demonstrate the relativity of supply verses demand. Your supply is my demand, and visa versa. Money like all other things is a commodity, and if I want a lot of gold I can purchase it with my labor or other goods.

Karl Marx voted for Reagan ?!!!

The concept was also discussed by Karl Marx. For example,

Capital can multiply itself only by exchanging itself for labor-power, by calling wage-labor into life. The labor-power of the wage-laborer can exchange itself for capital only by increasing capital, by strengthening that very power whose slave it is. Increase of capital, therefore, is increase of the proletariat, i.e., of the working class.

And so, the bourgeoisie and its economists maintain that the interest of the capitalist and of the laborer is the same. And in fact, so they are! The worker perishes if capital does not keep him busy. Capital perishes if it does not exploit labor-power, which, in order to exploit, it must buy. The more quickly the capital destined for production -- the productive capital -- increases, the more prosperous industry is, the more the bourgeoisie enriches itself, the better business gets, so many more workers does the capitalist need, so much the dearer does the worker sell himself. The fastest possible growth of productive capital is, therefore, the indispensable condition for a tolerable life to the laborer.

I removed this section from the main article because I don't see the direct relevance. The only direct relevance of Marx is that anti-communist rhetoric is often used in advocacy of trickle-down. However, this is rhetoric, not reason. And this is actually relevant to the Soviet style of communism, not Marxism.

I originally added it to the text because it supports the economic thesis. When even your ideological enemies agree with you then you should give them a little room. Did Adam Smith vote for Ronald Reagan!!! Of course he did not. If there is no discuss on this within the next week I'll put the text back. TERJE 26-JUNE-2004.

=== There was no context supplied with the quote, === and it seams to me that this very quote is a counter-argument to trickle-down. Are you saying Marx's position was that the capitalists (owners) weren't getting a fair deal. The idea of trickle-down is relief for the upper classes. This is the first time I have ever heard someone say Marx wasn't saying the opposite: that the working class wasn't getting a fair deal - that he was advocating relief for the lower classes. This article has a lot on politics, but is sorely lacking in facts and theories. For example, improvements have historically manifested in the upperclasses before manifesting in the lower classes. P.S. "When even your ideological enemies agree with you then..." implies that your point is a point of debate, not a point of theory or fact. So if you're going to reintroduce the work are you going to give it context? and if that context is as a point of debate, will you label it as such? I'm not saying don't put it in, just it should be relevant. And maybe you should spell it out - for those of us who don't yet see Marx as a proponent of the idea that the upper classes (owners) aren't getting a fair deal.

I don't think the Marx quote makes any comment on who is getting what deal. It is first and formost an economic observation. Namely that an abundance of capital leads to a better wage deal for workers. As such it is a quote that supports the trickle down argument. Would you be happy for me to put the quote back in if I added some more context around it? TERJE 28-JUN-2004.

Yes, I would be happy if you explained it.

The idea that something can be good for everyone is not the question though. Trickle-down is very specific - that, by a process benefits to the upperclasses trickle-down to the lower classes. So if you could explain how Marx demonstrated trickling-down, that would make the quote a much stronger addition to the article. This quote seems to be saying that the relationship between labor (lower classes) and capital (upper classes) is reciprical - that there is no argument leaning trickle-up, nor trickle-down. Until the last sentence; to improve the working condition of the working classes is the fastest (I presume best) way of stimulating the entire economy. That sounds like trickle-up in that the capital will be more productive and profitable after an improvement to the conditions of the working classes. That, by a process, benefit trickles up from the masses into the upper classes. So if you could explain how this quote translates into the idea that incentives for the wealthy, by a process, trickle down to the masses, that would be great. Also, where is this quote from?

Many major economists have said that to improve the lowest ranks of the economy is the best and fastest way to improve the economy as a whole; that to benefit the economy is to benefit everyone. For example Smith in Nations said that apprenticeships were a drag on the economy; that labor would be more motivated to enter a trade and to work hard and often if only they were free to do so and paid in direct reward for the quality and quantity of their labor. Keynes is credited with "demand-side" economics, that more money in the pockets of the masses will stimulate capitalist growth in the economy as a whole. And here, in this quote by Marx, Marx advises us to improve the working condition of the laborer. But this is all trickle-up. What is the theoretical body of trickle-down? Who has said it? and what is the merits of this theory? &nbsp - For example, the quote of Smith; who said this is an advocation of trickle-down? did Reagan say it? and if so, when and where?

P.S. Kuznets was added back in by someone with the addition of that which made Kuznets relevant to this article - improvements have hit the upper classes before the lower classes.

== Horse and Sparrow Economics == I removed this from the article

John Kenneth Galbraith has summarized trickle-down theory as "horse and sparrow" economics: "if you feed enough oats to the horse, some will pass through to feed the sparrows."

I think it is humerous and has a point, but I don't think its encyclopedic - at least, not in this article. I have put a link to John Kenneth Galbraith because it is relevant to trickle-down, just not central. P.S. a web search for "Horse and Sparrow" finds a lot of articles on trickle-down.

I'm from europe, and sorry, but from my peculiar point of view i see Marxism a wee bit more important, than Reagan. Please, write less about american tax percentages, and more about the global aspect.

The difference between you and the person that quoted Marx is that he is interest in positive economics. What he said was correct. Marx said that more capital into investment for the factory will lead to higher wages and those a higher purchasing power for the workers. That is trickle down. If the rich can keep more to invest through lower taxes then you will have higher wages for workers. He admits that more capital investment leads to higher wages and if lower taxes leads to more money for capital investment then he is clearly agreeing that trickle down works. —Preceding unsigned comment added by Sabaton10 (talk • contribs) 10:43, 18 September 2010 (UTC)

inappropriately credited to Galbraith?

The link you see above links to someone else's writing; while Galbraith is quoted in it, and I'll presume that Galbraith really did make the analogy, I think there is a better source of that information than the link above. I'm going to remove the link in the article. If you disagree, please tell me why and go ahead and readd the link to the article.

NPOV

I think supadawg pruned a little too much. It now seems less balanced, and less NPOV than before. The points made to refute Adam Smith's endorsement are basically correct, and to compleatly remove them instead of improving them seem counter-productive to NPOV. Therefore I added these points back in, and I will make efforts to clean them up and improve them.

I think a better approach to improving NPOV of this article is to clean up and improve the position of both sides.

I did leave out the section "criticisms of the reaganite pitch". This part seemed redundant and less well written. I invite people to look at the history and read that part and add it back and clean it up. It is not entirely without merit.

Is the blockquote in the middle the source of NPOV problems? Who is this attributed to? Can someone point to or reproduce David Stockman's speach?

On a related NPOV note, I just removed a line that seemed unsupported and wildly opinionated. Further corrections welcome -- I'm fairly new at this. --tgeller (talk) 23:19, 8 December 2007 (UTC)

Kuznets' Law

Is this really relevant to trickle down economics. Is it accurate to imply that he is anti-Keynes?

I removed this from the article:

Other variants include Kuznets' "Law", which says that increases in income inequality that occur in the early stages of industrialization are followed by increases in income equality. Ironically, this is close to some of Karl Marx's theories. A more general version argues that increases in gross domestic product are almost always good for the poor.

I doubt that Kuznets is directly relevant to trickle down theory and I doubt the characterizations here. Marx? A far more common characterization of Kuznets is that his work helped the "Keynesian Revolution". Yet, trickle down and supply side are anti-Keynes. A more appropriate place to mention Kuznets may be in the article on Keynes. Also, I think the wikipedia article on Kuznets is more 'encyclopedic'.

=== . . more kuznets' law === there is now relevant content form kuznets in the article: improvements occur first in the upper classes, then in the lower classes.

However, the history of kuznets in this article is a good illustration of a lack of differentiation; Kuznets has been repeatedly used as an argument for trickle-down. However,

• Incentive to Invest: Supply side Economics is billed by advocates as a means of increasing investment. However, it is not the only means, nor the most direct or effective means of increasing investment and to equate supply side with inducement to invest is erroneous and unencyclopedic. Supply side is a subset of inducement to invest - if it is such an inducement.
  • in fact, while many economic indicators improved during the reagan era, savings and investment by wealthy individuals and businesses did not significantly increase. They pocketed the money. Therefore - ironically - if these tax cuts were the cause of improvement in the economy, then it was the result of increased "aggregate demand" - straight out of Keynes' General Theory of Employment, Interest and Money. That is, the economic effect was the same as in Roosevelt's programs; more money in consumer's pockets translates into increased demand - which is a market regulated incentive to invest for producers.
  • Other Incentives: state initiated incentives to investment are far more successful if they directly impact investment. For example, tax breaks on the interests of home loans increases demand for homes and for loans - for investment.

P.S. Tell me how the average joe was induced to invest by Reaganomics. If you can do that you can validly cite Adam Smith as an advocate of trickle-down.

From the Ministry of Truth

This is an interesting sentence, and I've seen similar sentiments for two decades:

To Smith, the "well-governed society" is one in which free markets replace state command as the main method of resource allocation. Smith's argument is that increased division of labor (specialization) raises labor productivity. This in turn leads to lower costs, which are passed on to consumers in the form of lower prices (correcting for inflation).

This blockquote may seem uninformed, but I believe its inacuracies are intentional and politically motivated.

• "replaces state command" - Nations was written before Das Capital. Using the term "The state" instead of Nobility or Aristrocracy comes off as awkwardly anachronistic. "state command" is the language normally and appropriately used in describing controlled economies - communism. The rhetoric of the McCarthy Era. A more accurate portrait of Nations is that Smith made a solid case against corruption - as imbodied by feudal corporations, apprenticeships, monopolies, tarrifs, exclusive rights etcetera. For example, the nobility favored apprenticeships because the nobility was being paid royalties. The commerce that Smith witnessed and wrote about was a market economy, the complaint he made was that it was corrupted by special interest. Nobility (the state) - which was feudalistic, not communist - had their fingers in it along with many players outside of nobility and royalty. Any such arrangements in modern day U.S. would be illegal, and scandalous. As for "state command of resource allocation": Eisenhauer's Highway program was a state project which improved the transportation network of the United States, very much in accord with Nations, Chapter III, "the division of labor is limited by the extent of the market", wherein Smith explains how water carriage (boats) extend the market and therefore support improved productivity and dexterity of the labor force. Smith made one exception to controls / incentives in the economy: incentives to the military. And the phrase "tolerable degree of security" is frequent in the work. The U.S. military is quite impressive and it is state controlled. Further, Reagan increased military spending. On the other hand Eisenhauer warned of the 'military-industrial complex'.
• "well-governed society" - this, and "a tolerable degree of security" are qualifications. They are not central to his themes. For example, the free market economy he describes is wonderful assuming goods aren't stolen in transport.
• "correcting inflation" - costs were unnaturally high, not costs unnaturally rose. Whether or not inflation was a problem on top of an unfair market is a completely separate issue. Stagflation was a political hot button when supply-side economics came about, and to tack on 'inflation' to Smith's work for political points is manipulative - as is citing Smith in the first place. Quite the contrary to this orwellian interpretation, free markets often overheat and are characterized by rapid growth, heavy borrowing and inflation. In fact the Fed is currently keeping its eye on inflation due to very attractive interest rates.

== More from the Ministry of Truth == I pasted the following sentence from the article. It follows a line of reasoning that Smith advocated Supply-Side Economics.

A major variant of trickle-down theory would say that tax cuts for the rich, special benefits for them, subsidies for corporations, and in general, government/business cooperation would not simply provide direct benefits to business but would also help the middle classes and even the poor. In effect, it says that "what's good for business is good for the country."

Read the book! Incentives like these are EXACTLY what smith was critical of. It's the major theme of Nations. If an incentive benefits one group of producers over another, it's not a free market, and that's exactly what Smith's postion is.

Contention

Although we must contend that these two topics be comprised as one, we must hold for the individual user whose goals are to specifically atribute this to Reaganomics.

Stockman

Did Stockman actually use the phrase "trickle down" in defense of the policies? What was the context? Trickle down effect should be merged here, but first I want to resolve that question. Gazpacho 19:32, 13 August 2006 (UTC)

Oh heck, I'll merge it and let people add back what they can cite.

Move to trickle-down economics

It's come to my attention that the phrase "trickle-down" in politics comes from an earlier use of the phrase in regard to marketing (see trickle down effect, diffusion (business). "Trickle-down theory" can refer either to the marketing effect or the political catch phrase, so it should be disambiguated. Gazpacho 22:57, 20 August 2006 (UTC)

Moved. —Centrx→talk • 04:04, 7 September 2006 (UTC)

Placement of Thomas Sowell critique

The article states "Economist Thomas Sowell wrote that the actual path of money in a private enterprise economy is quite the opposite of that claimed by people who refer to the trickle-down theory....."

Where should this paragraph go? Currently it is in the "Proponent's views" section. I do not believe it should go there because the paragraph is in fact a critique of the alleged trickle-down theory. Perhaps, then, it should go in the "Criticisms" section since it is a criticism. I did move it to that section, but 71.231.182.24 reverted my edit. I suppose the problem is that Sowell is actually a proponent of low taxes; he has merely critised the idea that wealth "trickles down".

This makes him both a proponent of "trickle-down economics" as defined by its detractors and simultaneously a critic of the fundamental proposition of the allged trickle-down theory. So which section do you think this paragraph should go in? --69.69.186.223 19:45, 13 June 2007 (UTC)

Personally, I'm also confused. But according to his article, Sowell is indeed laissez-faire. Perhaps this quote was improperly selected, and should be replaced with one more coherent with his view of trickle-down theory (whatever it is). —Nahum Reduta (talk) 01:27, 20 January 2008 (UTC)

This makes him both a proponent of "trickle-down economics" as defined by its detractors and simultaneously a critic of the fundamental proposition of the allged trickle-down theory. So which section do you think this paragraph should go in? --69.69.186.223 19:45, 13 June 2007 (UTC)

Personally, I'm also confused. But according to his article, Sowell is indeed laissez-faire. Perhaps this quote was improperly selected, and should be replaced with one more coherent with his view of trickle-down theory (whatever it is). —Nahum Reduta (talk) 01:27, 20 January 2008 (UTC)

Why exactly does this article kick off with an ideologue saying the thing it is talking about doesn't exist? It's not "context" so much as "well poisoning". Grace Note (talk) 04:24, 3 December 2013 (UTC)

→→→→Because the thing this article is talking about does NOT exist. "Trickle down" is not a theory that exists or has proponents. It is a pejorative term used to mis-characterize and attack supply side economics. It would be like having an article which referred to Keynesian Economics as "Magic Money Out of Thin Air Theory." It's an attack on the theory itself to use the misnomer.AdamRSchuster (talk) 06:01, 17 February 2016 (UTC)

Sowell rejects the name "trickle-down", not the overall theory. He claims that it would be more aptly named "trickle-up". According to Sowell, when an investment is made, the benefit to those lower in the economic food chain is immediate, while the initial investor may not see a return for years. -JackieRipper (talk) 18:16, 27 March 2008 (UTC)

Those who imagine that profits first benefit business owners -- and that benefits only belatedly trickle down to workers -- have the sequence completely backward. When an investment is made, whether to build a railroad or to open a new restaurant, the first money is spent hiring people to do the work. Without that, nothing happens.

Money goes out first to pay expenses first and then comes back as profits later -- if at all. The high rate of failure of new businesses makes painfully clear that there is nothing inevitable about the money coming back.

Even with successful businesses, years can elapse between the initial investment and the return of earnings. From the time when an oil company begins spending money to explore for petroleum to the time when the first gasoline resulting from that exploration comes out of a pump at a filling station, a decade may have passed. In the meantime, all sorts of employees have been paid -- geologists, engineers, refinery workers, truck drivers.

http://www.capmag.com/article.asp?ID=1115

Trickle down doesent work?

This is in the Article:

Proponents argue economic growth flows down from the top to the bottom, indirectly benefiting those who do not directly benefit from the policy changes. However, there is very little proof that exist to show the correlation

Should there be a citation,or refrence or something on showing that it doesen't work? Edit: This article also seems overly critical of it, although as I am not an expert on economics (merely a 'passerby' :p) the Criticism may be well founded and true. Just pointing it out. --Passerby25 (talk) 03:49, 6 April 2008 (UTC)

• • Well I don't know if seems overly critical, but the article Reaganomics is fairly unbiased. --Taybo20 (talk) 02:14, 15 May 2008 (UTC)

Tax Rate 18%

Can we get a source that says that the tax rate is 18%? I guess I just want to know where this figure came from.--Taybo20 (talk) 02:15, 15 May 2008 (UTC)

I know this is an old comment, but I will respond anyway... it can either refer to low/est tax bracket (fed.) or capital gains. Capital gains being a major source of income for people who already possess a large amount of wealth. Notably, in regards to the 2012 election race, Romney's taxes were apparently so low because he has many (hundreds of?) millions in investments that grow in value, becoming taxable under various circumstances that differ from one type of investment to another (not all are taxed like securities; only in the year you cash out)184.189.220.114 (talk) 02:11, 7 December 2012 (UTC), and he deducts a significant percentage via any means he can (as do all intelligent people/businesses).184.189.220.114 (talk) 02:11, 7 December 2012 (UTC)

Galbraith

The section "Criticisms" contains a couple of claims that Galbraith makes about trickle-down economics, and lists his book, "The Good Society: The Humane Agenda" as a source. However, I can't find either of these claims in the book. I checked the history of the article and found that the claim that trickle-down economics "was partly to blame for the Panic of 1896" was created by User:Griot. I left a message for that user, but discovered on their user page that they've been blocked for using about 12 accounts. It's not unlikely that Galbraith would criticise trickle-down economics, but we could really do with a page/different source for this claim. I'm checking to see who added the "horse and sparrow" claim by Galbraith now. Darimoma (talk) 08:29, 24 July 2008 (UTC)

Okay, User:Gazpacho originally put the book in as a source, stating "I'm guessing this to be the source for Galbraith, based on the URL" (originally the quote unsourced; it was subsequently sourced, using a website - which is now down, and I assume was down at the time of Gazpacho's edit - with a URL ending in "goodsociety.htm"). However, I can't find mention of "horse and sparrow" economics in the book, and wikiquote has the quote as an unsourced quote. Can anyone can supply the page numbers of these two claims (or a different source)? Darimoma (talk) 08:49, 24 July 2008 (UTC)

N.B. User:Gazpacho has also been blocked for sock puppetry. Darimoma (talk) 08:51, 24 July 2008 (UTC)

I found the source for the Galbraith quote and entered it in teh article. 71.139.30.138 (talk) 23:33, 31 July 2008 (UTC)

Sources and article do not match

Given what I've said in the above section (Galbraith), and also given that source three does not seem to back up the claim that Clinton cut taxes by 3%, I'm concerned that in the past some edits and sources haven't been checked thoroughly enough.

Is there any sort of banner we can put on the article to warn readers that this is the case? Darimoma (talk) 08:23, 25 July 2008 (UTC)

I tracked the quote down to a 1982 article in the New York Review of Books. I put it in this article as sourced. 71.139.30.138 (talk) 23:33, 31 July 2008 (UTC)

Thanks. Does he mention the Panic of 1896 in that article as well? Darimoma (talk) 08:13, 1 August 2008 (UTC)

Also, I'm still concerned that the Clinton source doesn't seem to say what it is claimed to say. Darimoma (talk) 08:23, 1 August 2008 (UTC)

The source on Clinton was a prediction that was made before the tax cut took effect, not a report on what actually happened after the tax cut took effect, so I fixed the article to match the source. Grundle2600 (talk) 23:04, 10 October 2008 (UTC)

Source 7 doesn't mention trickle down anywhere on the page. It seems unlikely David Stockman ever said the supposed quote. — Preceding unsigned comment added by Sdmitch16 (talk • contribs) 14:55, 13 October 2012 (UTC)

Click on "Single Page" at the bottom of the Atlantic article cited. The Stockman quote is in there, just on a different web page. I don't like it when they chop articles into separate pages like that. TraderGail (talk) 17:33, 13 October 2012 (UTC)

Trickle down and outsourcing

If a rich American man invests in foreign labor then his tax levels won't effect American labor. Of course the free traders will say, "well products will be more expensive," but free traders lie.

The theory of trickle down economics revolves around investing in labor of your own country.

So if an Irish businessman, who owns stock in a company which employs Americans, gets taxed higher in Ireland it would effect those American employees.

If an American businessman, who owns stock in a company which employs Chinese, gets taxed higher in America it would effect those Chinese employees.

So tax the rich, in this global economy it won't effect Americans when the American rich are employing Chinese and Mexicans. Eat that free traders.98.165.6.225 (talk) 12:36, 4 September 2008 (UTC)

You are correct but they invest in foreign countries because the others countries have less regulatory costs, that is a fact. But if your solution is tax them then they will just leave the country as many are already doing to lower taxed countries such as Hong Kong and Singapore. Free trade is recognized by a good thing by 95% of Economist, from Adam Smith to Paul Krugman. If you want to publish an econ paper dismissing free trade then go ahead. You also realise that higher wages means higher production costs which means higher consumer costs right? Are you an advocate of inflation? —Preceding unsigned comment added by Sabaton10 (talk • contribs) 10:48, 18 September 2010 (UTC)

black eye

Don't give Smith a black eye: aside from this being mischievously misleading, your not helping. I removed the following from the article Blablablob (talk) 22:47, 21 September 2008 (UTC)

Adam Smith, in The Wealth of Nations, says that taxation "may obstruct the industry of the people, and discourage them from applying to certain branches of business which might give maintenance and employment to great multitudes. While it obliges the people to pay, it may thus diminish, or perhaps destroy, some of the funds which might enable them more easily to do so."

Why is the quote "mischievously misleading"? I'm reverting the edit; I think it's a bit odd to remove Adam Smith from an article on Tirckle-down. But if you disagree, please revert back, and explain why. Darimoma (talk) 01:43, 22 September 2008 (UTC)

if you want to use this quote in an article about tax breaks, that's fine; but as for tax breaks limited to the wealthy, you will need some other source - it was by no means, the intention of Smith to advocate anything like trickle down economics, and the oft repeated suggestion to that effect is uninformed, or dishonest. Stop!! If you have any respect for trade liberalization, and free markets and pure competition, stop! Dragging Smith through the mud is not helping. Blablablob (talk) 07:44, 3 October 2008 (UTC)

I've left in your comment pointing out that he refers to "the people", but removed the statement that from this we can infer that trickle-down is pseudo-science and historically inaccurate. They don't follow from what Smith said, and if you'd like to have Smith portrayed as not supporting tax breaks for the wealthy, a different quote from either Smith himself or some other reliable source is needed. Darimoma (talk) 10:25, 3 October 2008 (UTC)

you have to make a case for including Smith's quote, which you haven't. Thus far, the only case made for including Smith is in his work being misrepresented. Given the motivations and misrepresentation involved, abusing Smith in this fashion is a classic case of pseudo-science. If you don't like that, take out the quote all together.

BTW, your logic in the above paragraph is unsound - because Smith did not specify wealthy in this quote, it is a misrepresentation of what he said! so it does follow that from what he said, and what is attributed to him, that misrepresentation is taking place. That there were, and continue to be clear political and economic motivations for this representation recommends this as pseudo-science.

secondly, no body has to produce quotes to the effect that he didn't support such; on the contrary you have to produce a quote to the effect that he does - explicitly! besides, the quote you have is a quote portraying Smith as not supporting tax breaks for the wealthy - I'll spell it out: there's nothing in there about it!

if you or somebody else wants to start cherry picking now, you can probably find a quote that taken out of context is even easier to pass off as a recommendation of trickle-down - just consider the collages that comedians make from political speeches - but that would still constitute a misrepresentation of the work. Blablablob (talk) 18:35, 3 October 2008 (UTC)

I wouldn't have a problem with the quote if there were reliable secondary sources making the connection between Smith's views and trickle-down economics more explicit. Otherwise, we have to be wary about primary sources and the possibility that the article might be engaging in quote mining. Perhaps Adam Smith was constructing only one side of an argument regarding the merits and demerits of taxation, for example. This is indeed quite a common device in fundamental philosophical and scientific works (and was so particularly in Smith's time). Anyway, until such sources can be provided, and the improved context that would hopefully come along with better sources, I don't believe that the quote should remain in the article. siℓℓy rabbit (talk) 12:42, 3 October 2008 (UTC)

• I removed the quote. Connecting Smith to this late 20th century political idea without a source to say so is Original Research. Period. I would be happy to see a sourced comment about it, but that source cannot be the Wealth of Nations. Protonk (talk) 18:50, 3 October 2008 (UTC)

Anyone object to using http://www.weeklystandard.com/Utilities/printer_preview.asp?idArticle=13829&R=139AF981 - says "Smith's support for what we now call "trickle down" economic theories is politically unsustainable when real wages are not rising as rapidly as profits, and our television screens are bringing us scenes of shocking poverty in parts of the world." Darimoma (talk) 09:34, 13 October 2008 (UTC)

Ya I do because the Weekly Standard are a bunch of economic illiterates that think because one advocates a free market then they in turn advocate for tax breaks only for the rich. Adam Smith would have equally approved of cutting taxes for the middle class and lower class as Kennedy did. —Preceding unsigned comment added by Sabaton10 (talk • contribs) 10:52, 18 September 2010 (UTC)

Is "Criticism of Term" section necessary?

It seems to have been added to give credence to proponents of trickle-down economics, but this section doesn't say enough to add to the definition or understanding of the term, in my opinion. Scottishriver (talk) 22:33, 14 November 2008 (UTC)Scottishriver

Since the term itself is a spin, I added the counter term to the beginning to neutralize it. —Preceding unsigned comment added by 209.6.113.78 (talk) 03:43, 18 July 2009 (UTC)

A section about the results of real-world implementations.

This article needs a section about the results of real-world implementations of trickle-down economics. There's a similar section in the article about supply-side economics, but it focuses mostly on the effect that it had on government revenues. —Preceding unsigned comment added by 72.216.44.120 (talk) 03:21, 9 February 2009 (UTC)

Discussing the real world effects/implications of trickle-down economics would make about as much sense as discussing the environmental impact of unicorn wrangling. Trickle-down economics isn't an idea that exists so it can't be a policy in the real world. AdamRSchuster (talk) 06:10, 17 February 2016 (UTC)

Article organization

I helped put the article into its current format some time ago, and looking at it now, I don't really like this point-counterpoint business. It has no coherence, and it violates POV by accepting the position of those who use the term "trickle-down" pejoratively. Trickle-down economics is not a theory. It is a political epithet and label used against certain policies, whose proponents do not refer to them that way. I think the article should focus on the phrase as a phrase, covering its history, the motivations for its use, and the criticism of the phrase. The "proponents' views" section must go. It attempts to dispute the label while at the same time admitting it, which is fundamentally against NPOV. WillOakland (talk) 07:59, 2 May 2009 (UTC)

Uh, Im not an expert. But I dont agree, we learn about the trickling-down effect at University, check out Hirschman The Strategy of Economic Development 1958 —Preceding unsigned comment added by 87.96.244.108 (talk) 08:25, 10 May 2010 (UTC)

Republicans prefer "supply side" Democrats use "trickle down"

I'm pretty sure I remember Pres. Reagan using the term first. Dlohcierekim 13:40, 28 March 2010 (UTC)

"Supply side" v. "Trickle down"

• Quote:Such policies are primarily supported by Conservatives, who prefer the term "supply-side economics"[citation needed]. Conversely, the term "trickle-down economics" is more often favoured by Liberals and Socialists for its pejorative undertones.[2]

This quote is referenced to Aghion and Bolton (1997:151), which is false. Aghion and Bolton do not even touch upon the terminology used to describe this economic phenomena in political circles, but rather make a down-to-earth mathematical model of wealth generation and redistribution under trickle down economics, showing it cannot lead to the most efficient outcome. Nowhere in the text is the word "Socialist" or "Conservative" even mentioned! Further, I doubt, in any case, that either Aghion or Bolton would ever use the US meanings of "Liberal", "Conservative" or "Socialist", as they both have European academic and professional backgrounds. As such, even if they delved into terminology, they would have probably used "American social-liberal", "Libertarian" and "Social Democrat" to describe the above mentioned political currents. I am thus removing this misappropriated dubious statement. --Xanthar (talk) 08:11, 5 July 2010 (UTC)

Wasting my time with unencyclopedic edits

The reference to the Austrian School as those who considers the term "trickle down economics" to be wrong shows the editor is politically and not economically inclined. Anyone with a basic academic understanding of the term Austrian School will know how unrelated and non professional the sentence is. Not only is the edit itself wrong and openly biased it is also falsely marked with the minor flag. This is not a good faith edit. I kindly ask the editor Jmaximus to avoid disrupting the stable version of the article without further deliberation and consensus. --MeUser42 (talk) 10:22, 1 May 2012 (UTC)

Graph in lede

US Congressional Budget Office Graph of Outlays versus Revenues. (This is the graph IanOfNorwich was complaining about and what MeUser42 was replacing the graphs below with. TraderGail (talk) 17:45, 13 October 2012 (UTC))

U.S. mean family net worth by percentile of net worth (1989–2007). Trickle-down economics The policies of the 1980s caused the net worth of the most wealthy to increase, but did not increase the net worth of the poor.

Average tax rate percentages for the highest-income U.S. taxpayers, 1945-2009. Prior to the implementation of trickle-down economics, the effective tax rate on the very wealthy had started to slowly increase after falling for decades. Trickle-down economics reversed that trend and caused tax rates on the wealthy to fall sharply, as they have continued to do since.

Average annual growth in U.S. employment, by top income tax bracket rate, 1940-2011. Growth in employment has occurred most rapidly when the income taxes on the most wealthy have been the highest.

The distribution of net wealth in the United States, 2007. The chart is divided into the top 20% (blue), upper middle 20% (orange), middle 20% (red), and bottom 40% (green). (The net wealth of many people in the lowest 20% is negative because of debt.)

I think the graph in the lede might be considered potentially misleading. The problem is that it combines real and projected data, not in itself a bad thing but with the projected data included it gives a fairy strong impression of an inverse relationship between the depicted revenue and spending. However, if you obscure the projected part, to my eye at least, the relationship is far less clear.--IanOfNorwich (talk) 11:49, 9 July 2012 (UTC)

I agree. What does a graph of federal government outlays and receipts have to do with trickle-down, which is a tax policy, not a fiscal policy? The graphs which keep getting replaced with that graph (and a picture of Ronald Reagan, in front of a flag, by a libertarian activist editor User:MeUser42 no less[1]) actually describe the wealth and tax rates of the various strata of society. The point of trickle-down is that helping the rich would help the poor, and obviously that didn't happen, as the deleted graphs show. It is true that those "graphs suggest trickle down is the current policy" because by any measure (e.g., tax rates on the rich) trickle-down still is current policy, so its not NPOV to illustrate that. TraderGail (talk) 23:54, 12 October 2012 (UTC)

Trickle down is by no measure an objective "policy". It has been widely referred to as a straw-man argument. You have argued: "trickle-down still is current policy, so it's not NPOV"- do you have citations by current policy makers that they currently employ "trickle down"? If so, please provide them. If you have other objective sources to substantiate this claim, provide them as well. I am removing the newly added contested data until you will provide such WP:RS. Secondly, please assume good faith, as your recent message was uncivil and unhelpful. --MeUser42 (talk) 00:20, 13 October 2012 (UTC)

Are you familiar with Thomas Sowell? He states outright that trickle-down is a policy, such as in his essay at [2]. If you need a peer reviewed source, try Google Scholar: [3] explicitly refers to trickle down as a policy. Do you have any sources suggesting that federal government revenue and outlays have anything to do with trickle-down economics? Of course you don't because trickle-down is a wealth-related tax policy not a government fiscal policy. Since I agree with IanOfNorwich that the graph you keep replacing the relevant graphs with is both misleading and irrelevant, it is you who needs to obtain consensus. TraderGail (talk) 00:51, 13 October 2012 (UTC)

IanOfNorwich said: "I think the graph in the lede might be considered potentially misleading". I agree. Let's remove the graph. If you want to introduce your changea, you need to find the sources, not send me to Google scholar. Please read WP:RS. As for Sowell, from our article: "Sowell further has made the case[8] that no economist has ever advocated a "trickle-down" theory of economics, which is rather a misnomer attributed to certain economic ideas by political critics.[9]". Which, I think you would agree, strengthen my point. --MeUser42 (talk) 01:13, 13 October 2012 (UTC)

Nonetheless, Sowell refers to it as a policy, as does the peer reviewed source. But that doesn't have anything to do with whether the graphs you don't like accurately illustrate the article's subject. You've said nothing which would indicate that they don't, and provided no sources which would indicate that they don't. I have asked for a Wikipedia:Third opinion. TraderGail (talk) 04:58, 13 October 2012 (UTC)

It is you who needs to provide sources to substanciate your point that: "It is true that those "graphs suggest trickle down is the current policy" because by any measure (e.g., tax rates on the rich) trickle-down still is current policy, so its not NPOV to illustrate that." Not the other way around. --MeUser42 (talk) 10:30, 13 October 2012 (UTC)

That was what you said in your edit summary. I don't need to justify it. I'm not proposing that we include that in the article, just the facts in the graphs. Fact: in the decades following the initial implementation of trickle-down economics in the 1980s when tax rates were lowered on the wealthy, the middle class got smaller and the rich got richer. Fact: tax rates on the wealthy have continued to decline since then, even faster for the ultra-wealthy. You are absolutely right that suggests trickle-down is the current policy. So why do you want to hide the proof from readers instead of letting them decide for themselves whether it's the current policy? Fact: times and places with high tax rates on the wealthy experience faster job growth and faster economic growth. Again, what reason do you have for wanting to hide that than what anyone would reasonably assume when looking at what you put on User:MeUser42? You have accused me of POV, lack of good faith, and threatened to have me blocked. I think it is quite obvious to any observer who is pushing a POV here. TraderGail (talk) 17:32, 13 October 2012 (UTC)

This is not a forum, and I have no intention to engage in such and argument. You need to provide sources, otherwise it's WP:NOR.

I'm glad the quote (below) was a simple misunderstanding, and I wonder if this may be too. Could you say a little more about why you think the graphs are NPOV? Paum89 (talk) 00:36, 14 October 2012 (UTC)

Please read above. The graphs suggest "trickle down" is the current policy. The caption also adds: "...Trickle-down economics caused the net worth of the most wealthy to increase, but did not increase the net worth of the poor". This is blatant POV pushing. I almost feel this goes without saying. This also stands in contrast to it 1. being widely denounced as a straw man. 2. Lack of an objective source, instead relying on OR. --MeUser42 (talk) 03:23, 14 October 2012 (UTC)

I don't understand what you are getting at. Are you saying that the graphs are not objective because they are not factually accurate? They all seem to be based on government statistics. Are you suggesting that the the most wealthy did not get richer or that the poor did? Paum89 (talk) 05:17, 14 October 2012 (UTC)

t:::::::::1. Where did I say they are not factually accurate? 2. You might want to reread the discussion, I can't see how you can think that. --MeUser42 (talk) 10:53, 14 October 2012 (UTC)

Response to third opinion request:

Hi. I have reviewed the graphs, and most of the removed graphs and captions are a clear case of expressing a POV and/or synthetic conclusions. The graphs can be factually accurate while still having this problem. As the examples at WP:SYN show, it is often raw factual data that is abused to synthesize a conclusion. We can't take a graph of raw economic data and draw a new conclusion about what caused it. This is especially true when the subject is nebulous and poorly defined like this one is. Even with secondary source analysis, these primary source graphs must be carefully presented in a neutral way that avoids weasel words. The same is true of MeUser's CBO graph that tends to indicate that trickle-down was never implemented as a macroeconomic policy in any meaningful way, and definitely not since 2008. We can't present that graph and say "look here this proves that trickle down never was policy" any more than we can present graphs of increased wealth imbalance and say "trickle-down caused this". Gigs (talk) 15:36, 16 October 2012 (UTC)

Thanks. It will be relatively easy to find sources which make the explicit connection between trickle-down and the data shown. TraderGail (talk) 16:19, 16 October 2012 (UTC)

If you do find such sources, take care to write neutral captions for the images, and consider undue weight in readding them. Gigs (talk) 21:22, 16 October 2012 (UTC)

Thank you for taking the time. I only want to state i did not add the CBO graph and I myself removed it once there were POV concerns. --MeUser42 (talk) 19:58, 16 October 2012 (UTC)

Sources relating trickle-down directly to net worth, top tax rates, and employment growth:

Robert H. Frank (April 12, 2007) "In the Real World of Work and Wages, Trickle-Down Theories Don’t Hold Up" New York Times Economic Scene: "Trickle-down theorists are quick to object that higher taxes would cause top earners to work less and take fewer risks, thereby stifling economic growth. In their familiar rhetorical flourish, they insist that a more progressive tax system would kill the geese that lay the golden eggs. On close examination, however, this claim is supported neither by economic theory nor by empirical evidence.... If economic theory is unkind to trickle-down proponents, the lessons of experience are downright brutal. If lower real wages induce people to work shorter hours, then the opposite should be true when real wages increase. According to trickle-down theory, then, the cumulative effect of the last century’s sharp rise in real wages should have been a significant increase in hours worked. In fact, however, the workweek is much shorter now than in 1900. Trickle-down theory also predicts shorter workweeks in countries with lower real after-tax pay rates. Yet here, too, the numbers tell a different story. For example, even though chief executives in Japan earn less than one-fifth what their American counterparts do and face substantially higher marginal tax rates, Japanese executives do not log shorter hours. Trickle-down theory also predicts a positive correlation between inequality and economic growth, the idea being that income disparities strengthen motivation to get ahead. Yet when researchers track the data within individual countries over time, they find a negative correlation. In the decades immediately after World War II, for example, income inequality was low by historical standards, yet growth rates in most industrial countries were extremely high. In contrast, growth rates have been only about half as large in the years since 1973, a period in which inequality has been steadily rising. The same pattern has been observed in cross-national data.... larger shares for poor and middle-income groups were associated with higher growth rates."

Joseph E. Stiglitz (May 2011) "Of the 1%, by the 1%, for the 1%" Vanity Fair: "Of all the costs imposed on our society by the top 1 percent, perhaps the greatest is this: the erosion of our sense of identity, in which fair play, equality of opportunity, and a sense of community are so important. America has long prided itself on being a fair society, where everyone has an equal chance of getting ahead, but the statistics suggest otherwise: the chances of a poor citizen, or even a middle-class citizen, making it to the top in America are smaller than in many countries of Europe. The cards are stacked against them. It is this sense of an unjust system without opportunity that has given rise to the conflagrations in the Middle East: rising food prices and growing and persistent youth unemployment simply served as kindling. With youth unemployment in America at around 20 percent (and in some locations, and among some socio-demographic groups, at twice that); with one out of six Americans desiring a full-time job not able to get one; with one out of seven Americans on food stamps (and about the same number suffering from “food insecurity”)—given all this, there is ample evidence that something has blocked the vaunted “trickling down” from the top 1 percent to everyone else. All of this is having the predictable effect of creating alienation—voter turnout among those in their 20s in the last election stood at 21 percent, comparable to the unemployment rate"

Mehrun Etebari (July 17, 2003) "Trickle-down economics: Four Reasons Why It Just Doesn't Work" United for a Fair Economy: "The past 40 years have seen a gradual decrease in the top bracket's income tax rate, from 91% in 1963 to 35% in 2003. It went as low as 28% in 1988 and 1989 due to legislation passed under Reagan, the trickle-down theory's most famous adherent.... 1. Cutting the top tax rate does not lead to economic growth.... 2. Cutting the top tax rate does not lead to income growth.... 3. Cutting the top tax rate does not lead to wage growth.... 4. Cutting the top tax rate does not lead to job creation." (The four of which are each illustrated by separate time series graphs.)

Christopher J. Niggle (June 1998) "Equality, Democracy, Institutions, and Growth" Journal of Economic Issues Vol. 32, No. 2, pp. 523-530: "inequality can reduce economic growth in countries with democratic political systems. Empirical work based upon those models confirms that hypothesis across countries and through time." (Mentions trickle down in the sixth paragraph as discredited, but doesn't make a good pull quote.)

I will work on incorporating these sources into the text and revising the captions for the graph so that they are in line with them when I get time later. TraderGail (talk) 00:11, 17 October 2012 (UTC)

The first three of those are editorials and are not suitable sources for claims about anything other than the opinion of the respective authors. The final source looks more promising. Gigs (talk) 00:29, 17 October 2012 (UTC)

Are you saying that "Economic Scene" is an op-ed section of the NYT? I believe you are mistaken. It is a factual news section and Prof. Frank's article is a news piece based, as it says, on empirical research. Am I mistaken? Why do you say Stiglitz's article is an op-ed? It is also based on the nobellist's empirical work, is it not? Does WP:OI allow for including Etebari's graphs? TraderGail (talk) 01:33, 17 October 2012 (UTC)

No economist ever advocated "trickle down", it's a pejorative. So the discussion of 'does "trickle down" work' is a bit off base from the start, as this article should be more about the term, and not treat the term "trickle down" the same as RBC or the plucking model. It is well known that there is no consensus and agreed upon factual status to any claim regarding tax cuts, either from the left or from the right. If one view is to be presented, the opposite view should be presented as well, side by side (which is difficult in images), otherwise it's undue and should not be presented from the get go. --MeUser42 (talk) 02:30, 17 October 2012 (UTC)

Counterexamples are abundant, e.g. [4], [5], [6], [7]. While the latter two of those aren't using the term in a complimentary way, they aren't using it in a pejorative sense. What is the view opposite to these images, would you say? Paum89 (talk) 04:53, 17 October 2012 (UTC)

If Counterexamples are abundant, please provide some. 3 out of 4 of these studies find negative things in "trickle down", the second one doesn't deal with trickle down economics, but trickle down labor income ("That is, future labor income flows are affected by past profitability of the economy, so that returns to labor and physical capital are highly correlated, even though the contemporaneous correlations between market returns and changes in labor income might be low"). The opposite view changes from case to case, and, anything implicitly assuming 'trickle down' is the current policy is biased. --MeUser42 (talk) 08:01, 17 October 2012 (UTC)

Since when is labor income not part of economics? Do you have a source saying that no economist ever advocated "trickle down"? TraderGail (talk) 14:12, 17 October 2012 (UTC)

1. It is a part of economics, just not we are talking about a macro concept, and the article defines a micro concept. 2. Yes. The Sowell quote above. --MeUser42 (talk) 16:25, 17 October 2012 (UTC)

http://www.nber.org/papers/w11247.pdf *is* a microeconomics paper because it deals with aggregates across markets, not individual transactions. In any case, who is more reliable: Sowell saying it's never been advocated by economists, or the several economists who talk about how it has been advocated by other economists? Furthermore, what does any of this have to do with whether factual historical data in the form of graphs serve to illustrate the article or not? TraderGail (talk) 17:59, 17 October 2012 (UTC)

What's most reliable is if you'll bring an example of an economist advocating trickle down. The usage of "trickle down labor income" in the article (see included def. above) is very clearly different and unrelated to what this article deals with. --MeUser42 (talk) 00:50, 18 October 2012 (UTC)

"Economic Scene" is not a section, it's Frank's column before it was renamed "Economic View", and it does run in the business section. NYT supposedly fact-checks all their columns, even op-eds or so they say, and they regularly run retractions on errors that make it through. If Frank's source is bad you can send him and email and ger the primary sources he was reporting on, but my understanding is that Wikipedia is supposed to use secondary sources like Frank's and Stiglitz's columns. Can someone clarify this? Paum89 (talk) 04:53, 17 October 2012 (UTC)

It's true that secondary sources are preferred. In the field of economics, this "dismal science", the line is somewhat blurred between opinion piece and serious academic discourse. It's my opinion that the first three sources seem more like editorials, which should not be used for factual claims about anything but the author's opinion, but it is not a clear line. If you can find them, use more scholarly sources. Gigs (talk) 05:43, 17 October 2012 (UTC)

Unless you credibly explain how the outlay/expenditure graph has anything to do with trickle-down as you said it does, I will not be relying on your opinion. TraderGail (talk) 14:12, 17 October 2012 (UTC)

You found someone's opinion in a source, this doesn't make it fact. --MeUser42 (talk) 08:04, 17 October 2012 (UTC)

Exactly which statement(s) in the Frank excerpt are you suggesting are opinion instead of empirical fact? TraderGail (talk) 14:12, 17 October 2012 (UTC)

Trader, since you weren't satisfied with my answer I gave you on my RfA, I'll expand a little. It could be argued that if trickle-down is just a more pejorative word for "supply side economics", then a graph that shows continued pursuit of Keynesian-justified deficit spending would imply that such a policy was never seriously adhered to. But don't miss the entire point of my third opinion, that such synthetic conclusions like this are completely improper to make or even imply using primary source raw data graphs. Gigs (talk) 20:02, 17 October 2012 (UTC)

Who uses "trickle-down" to mean anything more than the idea that further enriching the rich will cause them to somehow enrich the poor? TraderGail (talk) 16:34, 21 October 2012 (UTC)

This is in response to the question above by an editor if you are allowed to include graphs from published works. The answer is yes. "Charts, graphs, and tables are not subject to copyright protection because they do not meet the first requirement for copyright protection, that is, they are not “original works of authorship,” under the definitions in the Act." See the following link which gives a clear and concise explanation http://www.lib.umich.edu/copyright/copyright-info/charts-tables-graphs. Guest2625 (talk) 11:15, 19 October 2012 (UTC)

I'm not trying to include new graphs, I'm trying to replace the ones that were there. At this point I guess the people who don't want the graphs in the article want me to come up with captions which (1) explain why the graphs relate to the text, (2) using statements from reliable sources. Looking around at other articles, this is an absurdly high bar but I'm willing to give it another try. TraderGail (talk) 16:34, 21 October 2012 (UTC)

David Stockman quote

MeUser42, I do not understand this revert which you have made twice without discussing it. The quote from the source is completely clear and consistent with the original edit:

“ The hard part of the supply-side tax cut is dropping the top rate from 70 to 50 percent—the rest of it is a secondary matter," Stockman explained. "The original argument was that the top bracket was too high, and that's having the most devastating effect on the economy. Then, the general argument was that, in order to make this palatable as a political matter, you had to bring down all the brackets. But, I mean, Kemp-Roth was always a Trojan horse to bring down the top rate."

A Trojan horse? This seemed a cynical concession for Stockman to make in private conversation while the Reagan Administration was still selling the supply-side doctrine to Congress. Yet he was conceding what the liberal Keynesian critics had argued from the outset—the supply-side theory was not a new economic theory at all but only new language and argument to conceal a hoary old Republican doctrine: give the tax cuts to the top brackets, the wealthiest individuals and largest enterprises, and let the good effects "trickle down" through the economy to reach everyone else. Yes, Stockman conceded, when one stripped away the new rhetoric emphasizing across-the-board cuts, the supply-side theory was really new clothes for the unpopular doctrine of the old Republican orthodoxy. "It's kind of hard to sell 'trickle down,'" he explained, "so the supply-side formula was the only way to get a tax policy that was really 'trickle down.' Supply-side is 'trickle-down' theory.

”

Since you have accused me of "edit warring" don't you think you should be discussing before making the same revert one after another? TraderGail (talk) 22:01, 13 October 2012 (UTC)

I agree MeUser42 should say more what they mean by "False representation of source" and which phrase(s) are being referred to. Paum89 (talk) 22:11, 13 October 2012 (UTC)

Fixed. The Cqoute is undue. --MeUser42 (talk) 22:31, 13 October 2012 (UTC)

Congressional Research Report on Tax Rates censored

"The Congressional Research Service has withdrawn an economic report that found no correlation between top tax rates and economic growth, a central tenet of conservative economic theory, after Senate Republicans raised concerns about the paper’s findings and wording." [Source:http://www.nytimes.com/2012/11/02/business/questions-raised-on-withdrawal-of-congressional-research-services-report-on-tax-rates.html] --80.226.24.7 (talk) 09:05, 2 November 2012 (UTC)

The author is standing by that report, by the way. Nobody has challenged the accuracy. Paum89 (talk) 05:30, 6 November 2012 (UTC)

Employment growth by top tax rate image

I've started a centralised discussion here regarding File:Employment growth by top tax rate.jpg, which is used in this article. Gabbe (talk) 09:59, 6 November 2012 (UTC)

There is further discussion of the deleted graph at Talk:Progressive tax#Why isn't causation supported? and the subsequent section. EllenCT (talk) 01:56, 7 October 2013 (UTC)

Labeling a relevant graph as vandalism

Trickle-down economics proposes that tax decreases on the wealthy lead to economic growth. Historical data, however, shows no correlation between top marginal tax rates and GDP growth.

I'm confused as to why the graph on the right was labeled as vandalism. Do you disagree on its inclusion in the article? If so why? Labeling the addition as vandalism is not productive. The graph addresses the trickle-down theory with actual empirical evidence. Do you feel the graph should be in a different paragraph of the article? What graph do you feel is reflective of trickle-doen theory? Guest2625 (talk) 01:28, 12 November 2012 (UTC)

Such graphs have been throughly discussed above, including a 3Opinion. Please read the above discussions. Please also note that no economist has ever advocated trickle down and this should not be treated as a serious academic theory, but as a political pejorative. --MeUser42 (talk) 01:32, 12 November 2012 (UTC)

Critics often point to declining real wages (excluding health insurance) as a response to trickle-down economics.

I'm confused by your argument. There is already a graph in the article that similarly disputes with empirical evidence the idea of trickle down theory. The caption of the removed graph completely parallels what trickle down theory states and then shows the actual empirical evidence. Why would Wikipedia want to only inform the reader of the idea of trickle down theory but not show the actual numerical facts? And also this graph is not at all like the above graphs which draw indirect inferences. This graph is completely on point as to trickle down theory. Please let me know a graph that you think is relevant for this article. Do you recommend a hypothetical graph of what trickle down theory proposes? Guest2625 (talk) 01:47, 12 November 2012 (UTC)

You say: "of what trickle down theory proposes" - could you please provide a source for someone proposing it? --MeUser42 (talk) 06:41, 12 November 2012 (UTC)

Here is the first sentence of the article:

Trickle-down economics and the trickle-down theory are terms in United States politics to refer to the idea that tax breaks or other economic benefits provided by government to businesses and the wealthy will benefit poorer members of society by improving the economy as a whole.

Do you feel it would be better in the caption if it stated "trickle down theory refers to the idea that tax decreases on the wealthy lead to economic growth" instead of the current wording in the caption? Guest2625 (talk) 10:12, 12 November 2012 (UTC)

Guest solicited my input again. First off, stop edit warring. You all are treading very close to the three revert rule, which could get one or both of you blocked or the article protected, even without technically hitting three reverts in one day. The cited source for the top graph here does not even mention "trickle-down economics". If no one can agree on what the term even means, or if it's ever been implemented as a policy, then it's impossible to use this kind of data, at least not presented in Wikipedia's voice. Also, please do not call clearly good-faith edits vandalism.

I suggest going back to fundamental discussions about whether this article should even exist, and if it should, what the topic actually refers to, and whether sources support the idea that it has actually been in use as an economic policy in the united states. None of those things seem clear to me, and until those issues are settled, I think it's impossible to have a discussion on the finer points. Gigs (talk) 13:59, 12 November 2012 (UTC)

The trouble with this graph is that it doesn't indicate what population is covered. I assume it is the U.S., but the legend doesn't say so. Kdammers (talk) 18:38, 23 September 2015 (UTC)

Add to 'Criticisms'?

Pope slams 'trickle-down economics'

“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,” Francis wrote. “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.”

http://thehill.com/blogs/global-affairs/global-trade-economy/191561-pope-slams-trickle-down-economics -- accessed 2013/11/27; similar article appeared in Baltimore Sun credited to Washington Post

I say add it to the article. I think it's a criticism that's having an important impact. Lereman (talk) 01:08, 1 December 2013 (UTC)

This Talk is more educational than most. What I found lacking was direct quatation of George W. Bush using the term "trickle down" to explain his own economic policies. It was the first time I heard the term. I think it should go to the latter part; even if no one before him used the term to defend ecomonic policies, but to attack them, he was the one who used it to explain that 'the money will trickle down'. It could have been around 2003 or 2004? But I find it fascinating how everyone forgot about it and how everyone forgot about that guy. Was he that unremarkable?

Criticisms section needs citation in the second paragraph

I'm skeptical of the claim and of the pertinence of the second paragraph about "Kenynesians generally argue for broad fiscal policies that are directed across the entire economy." Regardless, it should have a cite. Sorry for hiding this at the bottom but if I wandered too far into the talk page I got lost. WDRev (talk) 00:12, 28 April 2014 (UTC)

Thatcher

I was surprised to find no mention of Margaret Thatcher in the article. This theory was prevalent in the UK at the time and was a major economic factor. Myrvin (talk) 19:08, 19 January 2015 (UTC)

See the following: [8] [9] and [10]. Myrvin (talk) 19:13, 19 January 2015 (UTC)

"Trickle-down economics" is not a theory, it's a phrase used to criticize the theory. So the article is not correct in saying that trickle-down economics was Thatcher policy. The question is, did her opponents use the phrase to criticize her? The article needs to be fixed to reflect this. DonPMitchell (talk) 19:32, 20 June 2015 (UTC)

@Myrvin: Now that Thatcher is mentioned in the lede. Perhaps this could be expanded upon or moved to the body of text. As the lede is supposed to summarize content of article.

@DonPMitchell: Could you provide references for 'trickle down' not being a theory, and only used to negatively refer to certain policies? Jonpatterns (talk) 09:53, 21 June 2015 (UTC)

The article itself makes it clear that it's a criticism, in the opening paragraphs. The important point is that Reagan and Thatcher claimed they were stimulating business and job creation, but their critics suggested, via this weasel phrase "Trickle Down", that it was just about giving wealthy people more spending money. So the last sentence in the second paragraph should be adjusted. It's misleading to have "the idea was utilized by Margaret Thatcher". That implies that Trickle Down was her intention. It should state that Trickle Down was a criticism of Thatcherism. DonPMitchell (talk) 21:35, 21 June 2015 (UTC)

References

Inaccuracies

@RobinHood70: I'm surprised that you are questioning my use of a warning on this page after you stuck a verification tag on this article. (FYI - I couldn't find that phrase either.) But I also couldn't find what Absolutelypuremilk was talking about in relation to trickle-down economics. Unless it's - Don't pay taxes = More profit. Because I don't believe the, "In fact, free-market economics contends that additional wealth will be created when businesses are less hampered by government controls or high taxation, rather than existing wealth trickling down to the poor" nor was that expressly stated in the linked article. So, I'm inclined to warn readers after seeing these two erroneous sentences since I have little to zero faith in an accurate article on trickle-down economics, especially with an election year approaching. MurderByDeadcopy^"bang!" 00:16, 4 October 2015 (UTC)

Trickle-down economics affect more than just the US, so the fact that they're approaching an election isn't an overwhelming reason to assume that the article is inaccurate. That said, though, I highlighted one problem with a specific quote in the article, and you may well have discovered another, but I think using templates like {{weasel-inline}} or {{verify source}} are more appropriate for those sorts of issues than tagging the entire article as weasel-worded unless there are a lot of statements that include wordings that are particularly grandiose or unattributed (see WP:WEASEL, if you're not already familiar with it). In point of fact, I suspect that Absolutelypuremilk's addition is more problematic by virtue of the fact that it's a news blog, and not attributed to the writer, giving it more weight than it deserves. But getting back to the original point, if you're going to tag an entire article with something like that, you should outline on the talk page several instances where you found a problem with the article. In this case, we have only two problems, one of which is a recent addition that would still fall under BRD. – Robin Hood  ^(talk) 03:51, 4 October 2015 (UTC)

The full quote "What is sought by those who advocate lower rates of taxation or other reductions of government’s role in the economy is not the transfer of existing wealth to higher income earners or businesses but the creation of additional wealth when businesses are less hampered by government controls or by increasing government appropriation of that additional wealth under steeply progressive taxation laws." I did paraphrase this slightly, apologies if you think the meaning has been lost. Could you suggest a better paraphrasing? And yes it is a news blog, so according to WP:NEWSBLOG it should have the author (which is in fact Thomas Sowell) Absolutelypuremilk (talk) 09:37, 4 October 2015 (UTC)

My concern with the added statement was that it wasn't clear that that was from Sowell as well; it sounded more like it was unquestioned fact. Strictly on that point, the addition might be okay with a little rewording to make it clear that that's also Sowell's contention. But, in reviewing the article more thoroughly last night, I also noticed that we're citing Sowell a lot. I won't pretend to be a subject-matter expert by any means, but is he that prominent in the field of economics that his name should be attached to a good quarter of the article or so? If he is, then maybe he deserves more in the lead, but if he's just one economist of many, and his views aren't widely held, then he shouldn't be in the lead at all, and only take a small portion of the rest of the article. That he's well known is easily established by his bio, but that doesn't really establish that his views are widely held. – Robin Hood  ^(talk) 19:46, 4 October 2015 (UTC)

That is fair enough. Sowell is described as writing from a "from a conservative and classical liberal perspective, advocating free market economics" so I think he is as good a commentator as any, in the absence of a better source - currently we are saying that trickle-down is a misunderstanding of free-market economics, but not what free-market economics actually proposes. Especially as the rest of the article doesn't really refer to the fact that no one is actually proposing it and most of the article seems to be criticisms of a non-existent theory Absolutelypuremilk (talk) 09:17, 5 October 2015 (UTC)

I think that Sowell is definitely worth citing at least once, to illustrate opposition to the term. But given that his position is clearly controversial, I think it might be WP:UNDUE to cite him repeatedly or to single out his views in particular in the lead. Probably a better solution would be to find more opponents of the term so we can paraphrase them, or even some source that summarizes opposition to the term as a whole so we can be sure who the most prominent opponents are. --Aquillion (talk) 06:20, 22 October 2015 (UTC)

Conspiracy Theory

Can this page be deleted or at least renamed? Having traversed economic circles I can say that nobody seriously uses the term "trickle down economics". It sounds like some conspiracy theory or other imaginary idea, and thus should be treated as so. This page should be handled in the same manner as the former page on so-called "Cultural Marxism". 50.24.158.129 (talk) 02:02, 22 October 2015 (UTC)

Your viewpoint is already covered in the second paragraph of the article. Not to mention that right of center politicians have used the term in earnest, as described of David Stockman in the third paragraph. Trickle-down economics is posed as an informal term. Where as Cultural Marxism, is claimed (by proponents) to be a formal movement - complete with leaders of that movement being named and accused. Demonstrably erroneous claims have been made about their motives, as well as the nature of their work (The Frankfurt School in fact had nothing to do with the late 1960's usage of the term Political Correctness - its usage and meaning in that era was coined by Michel Foucault who specifically denied influence by The Frankfurt School [11]). William S. Lind who originated and re-popularized the conspiracy theory version of "Cultural Marxism" made various errant claims about it and about history throughout the 1990s Culture Wars as you can read in his writings. Some of his bolder claims include the supposed destruction of western culture its self, and that Marxists were controlling his television set. All of which is contrary to the original but incredibly minor usage of the term by Trent Schroyer - who was in fact, saying that Cultural Studies and Critical Theory didn't contain ENOUGH Marxism. So the contemporary usage of this term (that Cultural Studies and Critical Theory ARE Marxist), goes diametrically against its rad-left origins, as well as making numerous errant formal claims. Trickle down economics however, is already understood to be an informal term, and not a formal movement. This is why they are fundamentally different cases. I'll close by reminding you that Wikipedia is not a battleground. WP:BATTLEGROUND. If you wish to learn more about The Frankfurt School or the far more influential school's of sociology - such as The Birmingham School (who succeeded The Frankfurt School) or about Sociology in general for that matter - I suggest you go directly to the sources themselves, rather than blindly accept second hand political gossip about them... which is why Cultural Marxism is being treated on The Frankfurt School page. Because the sources matter - especially where formal claims are being made. --Jobrot (talk) 04:45, 22 October 2015 (UTC)

Graph of income in lead

Pre and post trickle down growth (32 years on left, 36 on right).

I have again removed a graph comparing income for different income groups over different Presidential eras. There was no reference in the graph showing that the Reagan era was the only trickle-down era, and it is only mentioned in the rest of the article in relation to a quote from David Stockwell. Not to mention the fact that the graph is extremely misleading, as it has FDR 1947-1979, Reagan 1979-2009 and Obama 2009-2015, which is clearly incorrect. Absolutelypuremilk (talk) 09:02, 18 September 2016 (UTC)

Replaced with a better one, that shows trickle down better. During this period (1979 to 2015) real income of the top 0.01% increased by 529% and by only 183% for the top 1%, for the top 5% by 55% and the bottom 20% by 0.9%. 2601:186:381:2A71:9DFE:AA27:2D2D:953C (talk) 05:04, 20 September 2016 (UTC)

I have again removed the graph, as you have not provided any reasoning as to why 1947-79 is an appropriate choice for "pre-trickle-down" and 1979-2015 is appropriate for "trickle-down". Not to mention the editorialising, claiming that "Trickle down economics lead to minimal growth" without any source. Absolutelypuremilk (talk) 08:12, 20 September 2016 (UTC)

Did you even look at the chart? Before trickle down we had a 91 to 70% upper income tax bracket and income was shared equally. After 1979 growth vanished, and all the income increase went to the rich and none of it trickled down. If you can find a better chart that shows this contrast, use it but you have no reason to leave nothing in the article. 2601:186:381:2A71:B1F2:D6CB:8659:2101 (talk) 04:27, 21 September 2016 (UTC)

You would not call a decrease from 108.1% increase in in 32 years to an 18.5% increase in 36 years a catastrophe, let alone "minimal growth"? Even the growth of the richest 5% declined from 106.3% to 54.7%. Those are the ones who should be screaming for an end to trickle down the most and a restoration of the 91% upper tax bracket. Why are you trying to hide the effects of trickle down from readers? But by all means feel free to write your own caption or find a chart that shows this better. 2601:186:381:2A71:B1F2:D6CB:8659:2101 (talk) 04:34, 21 September 2016 (UTC)

You have not provided any sources that show that trickle-down started in 1979, so there is no reason to assume that the change in growth is due to trickle-down. Absolutelypuremilk (talk) 09:01, 21 September 2016 (UTC)

It didn't. It started in 1982 when the upper income tax was reduced from 70% to 50% and in 1987 and 1988 when it was further reduced to 28%. But you can see the effect of trickle down by comparing years when it was not used with years that it was used. This chart even makes it look like it is trickling down. 2601:186:303:931:F8A1:E0CE:7C51:E9E4 (talk) 17:45, 21 September 2016 (UTC)

By the way it is redundant to say that "during periods of growth growth was distributed as shown". Added ref. 2601:186:303:931:5472:3EEF:C209:ADCB (talk) 02:15, 23 September 2016 (UTC)

Once again, you are asserting that trickle down started in 1982, but not providing a single source for that. You are then adding a graph which shows that after 1982, the income growth was more concentrated among the rich, and then saying that this was definitely down to trickle-down economics, not any other factor. Absolutelypuremilk (talk) 08:35, 23 September 2016 (UTC)

Really? Every article I read about trickle down associates it with taxes.[12][13][14][15] In 1982 the upper rate was lowered from 70% to 50%. Apparently that was enough to shift the majority of income growth going to the top 10% instead of to the bottom 90%, as was the case from 1975 to 1979. From 1979 to 1982 average income declined from $48,342 to $45,557 and thus is not included. This chart is smoother than the one by Tcherneva, even though it uses the same data, as it omits including 1987 to 1990, as average income declined those years, and including them caused a kink in the chart. Same for 1974 which also was a decline. I am not sure why you are missing that there is no income increase to share when income decreases. A separate chart though, could be made to show the share of income decrease during periods of income decreases. I am not sure it is worth making, as I can not see that it serves any purpose. I would suggest though that the chart above of pre and post trickle down growth distribution is the best one to use to summarize trickle down. 2601:186:303:931:F1A8:C3E3:5415:1657 (talk) 23:58, 23 September 2016 (UTC)

Actually trickle down started in 1964 when the upper income tax was reduced from 91% to 77%. This chart compares five different date ranges from 1947 to 2015. You can see the skew in growth beginning in 1964, although it did not affect the top 1% until the top rate was decreased to 50% in 1982. If you want to compare before and after 1981 you can use this chart. 2601:186:303:931:F1A8:C3E3:5415:1657 (talk) 05:04, 24 September 2016 (UTC)

I'm not sure how to explain this any more clearly. If you want to say in your caption that trickle-down started in 1982, then you will need a source which explicitly says that. Absolutelypuremilk (talk) 08:15, 6 October 2016 (UTC)

I am now going to remove the graph as you have not provided a source which says that trickle-down started in 1982. Absolutelypuremilk (talk) 10:11, 26 November 2016 (UTC)

Why was an op-ed used to support the false claim that the term isn't used by professional economists?

This op-ed by right-wind pundit Thomas Sowell is used to support the statement at the beginning of the introduction that trickle down, "is a populist political term used to characterize economic policies as favoring the wealthy or privileged. There is no 'trickle down' economics as defined by economists; the term is almost exclusively used by critics of policies with other established names."

On the contrary, these are from the first page of a Google Scholar search with 55,000 results: [16], [17], [18], [19], [20]. Because of this overwhelming evidence, I have edited the article accordingly. 174.16.126.149 (talk) 18:53, 25 November 2016 (UTC)

None of those papers use the term "trickle-down economics". They look instead at whether wealth created does in fact trickle down. They do not discuss "trickle-down economics" as if it is a theory in the sense that it is used here, that giving money to the rich through tax cuts will result in that money trickling down to the poor. Absolutelypuremilk (talk) 22:20, 25 November 2016 (UTC)

Okay, well then do a Google Scholar search on the literal string "trickle down economics" and there are over 6,000 hits. Do you think an op-ed by Sowell, a partisan pundit, is an authoritative or reliable source? 174.16.126.149 (talk) 01:16, 26 November 2016 (UTC)

Once again, none of those papers advocate trickle-down economics or reference any papers that do. Absolutelypuremilk (talk) 10:08, 26 November 2016 (UTC)

The very first one does. You looked through all 6,000 of them? 174.16.126.149 (talk) 16:14, 26 November 2016 (UTC)

As I said that paper looks at whether wealth trickles down or not. In fact its conclusion is "The main economic insight which comes out of our analysis in this paper is that, even though wealth does trickle-down from the rich to the poor and leads to a unique steady-state distribution of wealth under sufficiently high rates of capital accumulation, there is still room for wealth redistribution policies to improve the long-run efficiency of the economy. In other words, the trickle down mechanism is not sufficient to eventually reach an efficient distribution of resources, even in the best possible scenario. The reason why redistribution improves production efficiency is that with redistribution the poor need to borrow less to invest and therefore their incentives to maximize profits are distorted less. Thus, redistribution improves the efficiency of the economy because it brings about greater equality of opportunity and because it accelerates the trickle-down process." I looked through the first page - if you can find one that actually says that it is a good idea, then feel free to post it. Absolutelypuremilk (talk) 09:41, 27 November 2016 (UTC)

Scientifical Not political

I shall argue later with my proper arguments on essay that the concept is not political but mathematical, scientifical.

The new title is Tricke Everywhere Economics.

Just because we have too many wealthy countries without fiscal policy or TAXING system at all.

Therefore I do argue that the economy (tenders, money, goods) spreads everywhere due to the spontanous interactions in marketplace of ideas.

Resouces are Infinite. Kartasto (talk) 16:59, 8 January 2023 (UTC)

Be careful of original research. We need WP:V WP:RS Andre🚐 20:17, 31 January 2023 (UTC)

Finnish version - The Effect

According to Finnish version Wikipedia tells about something like this:

"When the more wealthy people is under lover taxing policy the money will trickle down to the tax payers who earn less".

I think that upper and lover are only metaforas.

In democratic society with the rule of law capitalism - quite free market economy - tax payers interact and trade with each other so many many times per day. They all are free to choose with who they trade and interact: a but like the equality in markets.

Prices are negotation question often.

And because the monopolies are not allowed -therefore - there are no force by the shop keepers let alone rules by the wallet keepers who naturally do make the decisions to trade with who or when they fancy to.

With too bad habits you may be *not wanted customer or user*.

As we know You may buy Jaguar or Lada: since according to M. Porter within the all and every industry there are several different kind of competitors.

In wealthy countries the rich or high incomes people spend a lot and therefore the capital and equities spread everywhere in society: take a look at the places and lands where the taxing policy with a low tax percent concern only companies and enterprices.

Individual workers are freed and fled from taxing system.

Comments? Kartasto (talk) 07:45, 1 February 2023 (UTC)

But = bit.

Sorry typo Kartasto (talk) 07:48, 1 February 2023 (UTC)

I find the English a bit hard to understand, it seems basically to be saying the same as trickle down advocates say. In particular they seem to be saying that in a free market without much regulation poorer people are able to negotiate a reasonable deal for themselves and get a decent wage. Unfortunately this doesnot seem to be the case even if richer people and companies did not have better access to lower charges and good advice it falls foul of the same sort of maths as affects people investing in only a narrow range of shares. See for example a nice readable account in Is Inequality Inevitable. NadVolum (talk) 14:32, 1 February 2023 (UTC)

Payola

This article is in need of recognizing the political grift of paying the electorate for an election. Thomas Sowell's "trickle down economic" recognition of the actuality of the political crime. The legislative violation of the Hatch Act. JohnPritchard (talk) 14:38, 1 December 2023 (UTC)

You will need to demonstrate broad WP:RS evidence for that narrative if it is to be considered for this article page. SPECIFICO talk 15:53, 1 December 2023 (UTC)

I'm thinking that my role, in this case, is to recognize a well known if barely recognized concept. JohnPritchard (talk) 23:22, 4 December 2023 (UTC)

When Donald Trump campaigns on "Tax Cuts For The Rich", the quid pro quo constitutes a political crime. Political grift in action. The truth of "trickle down economics". The legislative Hatch Act violation. JohnPritchard (talk) 14:29, 18 December 2023 (UTC)