Trickle Down Doesn’t Hold Its’ Water

Trickle Down Doesn’t Hold Its’ Water

Washington : DC : USA | Apr 11, 2012 at 9:17 AM PDT
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Trickle Down Doesn't Work

When you hear the words “trickle down," do you envision a tiny mountain stream winding its way through a rocky and jagged path along a mountain side? Do you see beautiful mountain flowers alongside this beautiful stream in full bloom? Is the sun shining and the day bright? Is the green grass tall and strong? I do. The idea is that the stream will trickle down and eventually meet with other tiny streams to create a roaring river. This is the philosophy behind trickle down economics. The idea here is that the wealthy will invest in revenue generating ventures, which will in turn “trickle down” to the little people at the end of the raging river of economic growth.

The reality is that trickle down economics does not work. The main theology is that if income taxes and capital gains taxes are lowered, the wealthy will be more likely to invest their money into revenue generating enterprises. This is intended to increase the supply of goods available (Supply-Side Economics) and lower the costs to consumers. This is the old “If you build it, they will come” mentality. Well, surprise-surprise-surprise! It doesn’t work!

“When President Obama” declared that decades of Republican trickle-down economics "never worked," conservatives were predictably apoplectic.” (Definition: Apoplectic- Overcome with anger; extremely indignant. Relating to or denoting apoplexy (stroke): "an apoplectic attack".) Of course the Republicans did not want to hear that their philosophy didn’t work. After all, they had touted to the highest mountain tops that as long as income taxes and capital gains taxes were lower, the wealthy would invest and carry our country toward economic prosperity.

The idea that a political party could be so arrogant that they decide to rewrite economic theory to contort to their belief system is ridiculous. Yet, many consumers buy it hook, line and sinker. It is amazing when you see the people that support this silliness. Hard-working Americans struggling to make ends meet are willing to step up and support a philosophy that is basically promising them tidbits of wealth from the ultra rich.

I struggle to understand how someone can support this philosophy. I have asked many friends about this issue and it seems that their hope of one day becoming one of the ultra-rich is behind their support of this belief system. They honestly believe that if they support this idea they may reap the reward of becoming wealthy one day. If only they could realize that they will never become one of the top 1%. It simply doesn’t happen. And furthermore, as we see the chasm between the ultra wealthy and the middle class grow, their hopes should be fading. Instead it seems to be even stronger.

When we take a closer look at the tax rate on the top 1% and compare it to GDP, Income Growth Rate, Wage Growth and Job Creation it quickly becomes evident that the economy is not stronger with lower tax rates on the rich. The simple fact of the matter here is that the wealthiest of this country will invest their funds where they feel they will receive the greatest returns. They will do this regardless of tax rates. They will do this in spite of the state of the economy. They will not pack up and move to another country because they don’t want to pay taxes. Instead they will hire teams of lawyers to find ways to avoid paying the taxes they owe.

I will continue to be entertained, baffled and totally dismayed as supporters of trickle down economics tout their message of hope in the future. I will never, however, become a blind supporter of something that does not work.

If you like writing about U.S. politics and the 2012 campaign, enter "The American Pundit" competition. Allvoices is awarding four $250 prizes each month between now and November. These monthly winners earn eligibility for the $5,000 grand prize, to be awarded after the November election.


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Amee Ellsworth is based in Bennett, Colorado, United States of America, and is an Anchor on Allvoices.
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