The Myth of Trickle Down Economics (Healthcare)

Conservatives are strong proponents of trickle-down economics, and unfortunately the Michigan Legislature is dominated by conservatives. I say “unfortunately” because trickle-down economics has left a legacy of failures as long as its own pedigree. The concept was that by reducing taxes on the richest Americans the increased capital would eventually “trickle-down” into investments in businesses that would create more jobs for middle-class families. Prior to Reagan, the highest tax brackets ranged from roughly 90% to 50%. During that period we had the most successful period of economic growth in world history. According to trickle-down proponents, lowering the highest tax rates would result in even greater expansion of growth and wealth that would benefit all Americans. The result of every across the board tax cuts on the wealthiest Americans has been a slower growth rate, and an unprecedented redistribution of wealth to the top 1% of Americans. Conservatives argue that trickle-down economics benefits all because the economic “pie” is bigger – lower income Americans are getter a smaller piece of a bigger pie. The data is undeniable, income for middle class has remained stagnant for decades: in the last 30 years 90% of working Americans have seen a growth rate of only around 15%, and most of that was lost with the real estate bubble crash. Income for the top 1% of Americans during the same period has increased more than 300%. The conservative economic agenda included deregulating capital markets, free trade and “right to work” legislation. The result has been jobs being transferred to other countries and lower wages here in Michigan. Reducing tax rates for the wealthiest has also resulted in budget deficits, where the response of conservatives has been to reduce the social safety net and investments in education and infrastructure to justify even more tax cuts – rob from the poor to pay the rich.

Another variation of trickle-down economics is reducing corporate taxes and relying on tax giveaways. The results of tax giveaways to corporations has been just as disastrous for Michigan. The vast majority of communities offering corporate tax give-aways have been left to face disastrous financial decisions afterwards. Instead of giving across the board tax reductions or giveaways, why not target tax reductions specifically for job creation? That is not part of the Republican agenda of enriching the rich in exchange for campaign funds to help keep power. Stealing money from tax funds collected specifically for the Detroit Schools to subsidize the profits of the Detroit Pistons is an example of how Michigan Republicans enable income redistribution. Trumpcare is another example of taking from the middle-class to help the rich to get richer at the expense of working class Americans.

The ultimate conservative experiment with trickle-down economics is the disaster known as Kansas. Slashing individual and corporate tax rates has resulted in an unmitigated social and financial catastrophe. Contrast the dismal economy of Kansas (and Michigan) with the “left coast liberal” economy of California, with it’s progressive taxes and Green Economy. With middle-class Michiganders increasingly suffering from Conservative economics you would think that there would be widespread discontent with Republican rank and file, but this has not been the case so far. Michiganders have consistently voted against their own economic interests in state elections. Perhaps the next generation of Michiganders will stop responding to the trickle-down pied pipers, once they realize that they have better economic prospects in a third world country like Viet Nam… which, by the way, has better roads…