Does trickle-down economics actually work? - Jonathan Smith
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The Laffer Curve: There is a theory behind the idea of different tax rates creating different tax revenues known as The Laffer Curve. At 0% tax there is zero revenue because nobody pays tax and at 100% tax there is also zero revenue because nobody would work. Because of this, Laffer theorizes that there is an optimum point in which tax revenue is highest. Therefore cutting taxes from above this optimum point could lead to higher tax revenues. More details here.
Raeganomics: President Reagan implemented a number of economic policies and this coined the term “Raeganomics.” These included but were not limited to:
- Reducing government spending
- Reducing taxes
- Reducing regulations
- Slowing down money growth to control inflation
More info can be found here
Supply Side Economics: Economic policy is divided into supply-side and demand-side. Trickledown economics is a supply-side policy. An introduction to supply and demand can be found here with a really useful page on supply-side economics here. More information around trickledown economics specifically is here.
The Kansas State Example: The Kansas example in the video gives an example of where supply side economics didn’t work and is available here.
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