Supply Side is back. Trickle Up is better

The President and his economics team are scheduled to unveil a tax package tomorrow that is the third incarnation of supply side economics. For those who do not remember the first two trips to this rodeo in the Reagan and Second Bush Presidencies, it is a theory that if you reduce taxes on the top, benefits will trickle down as the wealthy reinvest their newly found disposable income and grow the economy and create jobs. Most point to the Reagan Administration as a model for the success of that theory. It is not. What created the Reagan economic success was largely three factors: a reduction in gas prices, a reduction in interest rates, and a proliferation of handing out credit cards like they were candy. The Reagan and Bush II tax cuts markedly increased our national debt and did not help the economy long term. In contrast, when Presidents Clinton and Obama raised taxes on the top earners, the economy and job creation steadily grew better than in the Reagan and Bush Presidencies that cut them.

Trickle Up Economics is better. Raising the minimum wage, expanding the earned income tax credit, and increasing tax credit opportunities for the lower and middle classes as well as small to medium sized businesses are better strategies for sustained long-term growth and job creation. There are so many Fortune 500 individuals and businesses to go around. Better to help the many at the middle and lower ends of the totem pole than the few at the top who will thrive no matter what.

https://www.nytimes.com/2017/04/24/opinion/zombies-of-voodoo-economics.html?rref=collection%2Fcolumn%2Fpaul-krugman&action=click&contentCollection=opinion&region=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection&_r=0