One of the most ideologically damaging aspects of Labour opening the floodgates of printed billions to corporate banks is the use of failed trickle down economics to justify it.
Not only does this speculator welfare damage the immediate aspirations of renters and first time home buyers, it’s a flawed bitter solution that promises empty neoliberal faith rather than genuine hope.
Labour flooded the speculators under the belief that this speculative sugar hit in property valuations will generate enough paper illusion of wealth that credit cards will be extended and generate a wave of extra spending into the local community.
Turns out the neoliberal promise of trickle down, the idea tax cuts for the wealthy will trickle down to us little people was all bullshit…
Tax cuts for the wealthy have long drawn support from conservative lawmakers and economists who argue that such measures will “trickle down” and eventually boost jobs and incomes for everyone else. But a new study from the London School of Economics says 50 years of such tax cuts have only helped one group — the rich.
The new paper, by David Hope of the London School of Economics and Julian Limberg of King’s College London, examines 18 developed countries — from Australia to the United States — over a 50-year period from 1965 to 2015. The study compared countries that passed tax cuts in a specific year, such as the U.S. in 1982 when President Ronald Reagan slashed taxes on the wealthy, with those that didn’t, and then examined their economic outcomes.
Per capita gross domestic product and unemployment rates were nearly identical after five years in countries that slashed taxes on the rich and in those that didn’t, the study found.
But the analysis discovered one major change: The incomes of the rich grew much faster in countries where tax rates were lowered. Instead of trickling down to the middle class, tax cuts for the rich may not accomplish much more than help the rich keep more of their riches and exacerbate income inequality, the research indicates.
“Based on our research, we would argue that the economic rationale for keeping taxes on the rich low is weak,” Julian Limberg, a co-author of the study and a lecturer in public policy at King’s College London, said in an email to CBS MoneyWatch. “In fact, if we look back into history, the period with the highest taxes on the rich — the postwar period — was also a period with high economic growth and low unemployment.”
…has anyone told Labour yet?
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