Trickle Down Economics

11 thoughts
last posted Feb. 18, 2013, 4:57 a.m.

10 earlier thoughts


When tax rates are reduced, investment in productive enterprise is encouraged. When productive enterprise receives investment capital, the workers must be hired to produce output to yield a return on that investment. When value is created through this labor in a new enterprise, our economy expands and new wealth is created. When new wealth is created taxes are paid on income that didn't previously exist.

As a result of lower tax rates and more productive investment, there are more jobs and less unemployment. Less unemployment means more income (that didn't previously exist) which taxes are extracted from. If the venture succeeds and new wealth is created for the investors, again, more taxes are paid on gains that didn't previously exist.