"Trickle Down Theory" and "Tax Cuts for the Rich" 1st Edition, Kindle Edition
Use the Amazon App to scan ISBNs and compare prices.
- Highlight, take notes, and search in the book
Enjoy the freedom to explore over 1 million titles and thousands of audiobooks on any device.
- Highlight, take notes, and search in the book
Enter your mobile number or email address below and we'll send you a link to download the free Kindle App. Then you can start reading Kindle books on your smartphone, tablet, or computer - no Kindle device required.
To get the free app, enter your mobile phone number.
Customers Who Bought This Item Also Bought
Top Customer Reviews
His main points are that:
1. After World War I, Democrats and Republicans and even John Maynard Keynes, agreed that tax rates were too high. Because of the high rates of taxation, rich people tended to put their money into tax shelters, rather than investing in business ventures that employ people. This was not a politically divisive issue at the time.
2. No politician nor economist ever advocated anything called the "trickle-down theory." In fact, when tax rates are reduced, money is taken out of tax shelters and invested in business ventures that hire workers. The money goes directly to those workers, in hopes that the business will succeed and money will Trickle Up to the investors. FDR coined the phrase "trickle-down" as an epithet for his opponents.
3. The tax debate eventually became a political issue, with Democrats (but not JFK) advocating higher tax rates and Republicans advocating lower tax rates. At that point, Democrats started accusing Republicans of wanting to decrease tax rates because they only care about the rich. This is pure demagoguery; both parties previously admitted that when tax rates are too high, it diminishes revenues to the treasury and hurts the common working man who needs a job.
The pamphlet is short (main text 13 pages), to the point and very readable. It's replete with numerous little-known facts about the politics of our past and even a little criticism of popular history texts.
General impressions on this short piece:
Yes! Tax rates are symbolic, and nominal rates of tax have almost nothing to do with actual tax collection. Taxable income is different to gross income, and this is a distinction that is lost on much of the electorate.
He could have gone a bit further in his discussion of tax exempt securities and explained why the government is not going to make them taxable any time soon (i.e., they need money from somewhere to finance their schemes and they may be dishonest and incompetent-- but they aren't stupid/ self-destructive).
The net effect of higher taxes on the wealthy is to tax lower income of people MORE because the value of tax exempt securities is higher to high earners.
There are two very different visions with respect to earnings spillover of wealthy people vs. different decisions generating more wealth for EVERYONE, and people keep talking past each other because they don't realize the details of their vision.
Because this broadside is so short, it costs nothing to reread it a week or so later in order to pick up the last few bits of information out of it that you might not have been able to pick up on the first pass.
There are also MANY references, and so it is possible to look further into this topic if you care to. (I don't, as I'm prepared to take Sowell at his word.)
Verdict: Highly recommended. Worth the time. Worth the money.
The debate about "tax cuts for the rich" has been framed as a debate about giving the rich more to spend, so that some of that money would end up in the pockets of lower classes. This short booklet makes it clear that the real debate is about the economic choices the rich make to maximize the return on money they save-- Fundamentally, whether to invest in lower interest government issued tax free bonds that encourage government spending but weakly stimulate the economy as a whole, or whether to invest in private bonds that both pay higher interest and that enable businesses to make infrastructure investments resulting in immediate jobs and setting the stage for future growth.
In a high tax environment, tax free government issued bonds result in a higher net rate of return than do the higher interest rate private bonds-- because interest received from private bonds is generally taxed at the tax payer's marginal rate.
An implication of this explanation is that there should be a strong correlation between the interest rate spread of government and private issued bonds, and the marginal tax rates. There is also an agency related conflict of interest, where government reaps a benefit because by raising taxes the investor attractiveness of government bonds to investors is increased; government has no intrinsic motive to make private investment attractive.
I really enjoyed reading this in-depth explanation of a concept that is ridiculed by so many, mainly because of the inaccurate stereotype to which it has been reduced by the media. The material is not easy, but the explanation is clear and understandable.
Thank You, Mr. Sowell!
Most Recent Customer Reviews
Thomas Sowell does it again, breaking down a popular argument to show there wasn't an argument to begin with. Read morePublished 20 days ago by Amazon Customer
Not worth buying. Lots of nothing in 13 pages. Does not talk about the trickle down does not work as planned because it stops at the executive level of businesses. Read morePublished 20 days ago by B. W. C.
Not very long but full of information. Written in a way anyone can understand and it will make you more financially intelligent. Highly recommended reading.Published 21 days ago by John Phillips
Please pass this to your liberal friends when the president proposes tax cuts to stimulate the economy. No such thing as trickle down.Published 22 days ago by JL_1231
Quick, what economist invented the trickle down theory? Be informed. Better yet, be educated. Thomas Sowell is where to start.Published 23 days ago by JasonT
Black + Red = Libertarian Socialism (red=socialism, black=anarchism). Yet, the author Thomas Sowell is apparently a free market advocate and calls himself one of those... Read morePublished 27 days ago by Austin
Enjoyed this ,short, but informative essay on the Trickle down premise.. Changed my views on the subject
I recommend this book to any seeking more light
Sowell for a clear understanding of CONSERVATIVE REPUBLICAN ECONOMICS.Published 1 month ago by styarbrough
I gave this book 5 stars because it was a real education for those whose believe the lies propagated by the mainstream news media; legislation, by the Democrats and some... Read morePublished 1 month ago by Christopher Wynn
Set up an Amazon Giveaway
What Other Items Do Customers Buy After Viewing This Item?
Look for Similar Items by Category
- Books > Business & Money > Accounting
- Books > Business & Money > Economics > Economic Conditions
- Books > Business & Money > Economics > Economic Policy & Development
- Books > Business & Money > Taxation
- Books > Politics & Social Sciences > Politics & Government > Political Science > Reference
- Books > Politics & Social Sciences > Politics & Government > Public Affairs & Policy > Economic Policy
- Books > Politics & Social Sciences > Politics & Government > Specific Topics > Political Economy
- Kindle Store > Kindle Short Reads > 30 minutes (12-21 pages) > Business & Money
- Kindle Store > Kindle Short Reads > 30 minutes (12-21 pages) > Politics & Social Sciences
- Kindle Store > Kindle eBooks > Business & Money > Economics > Economic Conditions
- Kindle Store > Kindle eBooks > Business & Money > Economics > Economic Policy & Development
- Kindle Store > Kindle eBooks > Business & Money > Taxation
- Kindle Store > Kindle eBooks > Politics & Social Sciences