In Other News, Water Is Wet and the Sun Is Bright

It’s always satisfying when reality proves your theories to be true. Data-driven confirmation never gets old. Cole Stangler at the International Business Times says:

[a] study from Owen Zidar, a professor at the University of Chicago Booth School of Business, found that tax cuts aimed at the top 10 percent of earners produce little stimulative effect on the overall economy. On the other hand, those aimed at the bottom 90 percent have a greater impact.

Zidar examined the short- to medium-term impact of tax changes at the state and federal levels going back to 1948. On the national level, he found a 1 percent gross domestic product (GDP) tax cut aimed at the bottom 90 percent translates to job growth of 2 to 5 percent, but the impact of a similar cut on the top 10 percent of earners has a negligible effect. He reached similar conclusions on the state level: Tax decreases for most of the population generated 5 percent employment growth, but yielded little change when applied to the top income bracket.

Who’d have thought that keeping money in the hands of more people would result in more spending and more jobs? It’s almost like basic arithmetic actually works. Yes, and Zidar’s study found raising taxes on the wealthy has little effect on the economy, too, while tax increases on the poor have a detrimental effect. You can add Zidar’s hard work to the mountain of data disproving conservative trickle-down economic theories. Those weak old Reagan-era economic policies are starting to look as ridiculous and fusty as Reagan-era fashions.

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