Well, duh! Cutting taxes on the rich just makes them richer!

 

Headline from CBS News

50 years of tax cuts for the rich failed to trickle down, economics study says

"The new paper, by David Hope of the London School of Economics and Julian Limberg of King's College London, examines 18 developed countries — from Australia to the United States — over a 50-year period from 1965 to 2015. The study compared countries that passed tax cuts ... with those that didn't, and then examined their economic outcomes. 

"Per capita gross domestic product and unemployment rates were nearly identical after five years in countries that slashed taxes on the rich and in those that didn't, the study found.

"But the analysis discovered one major change: The incomes of the rich grew much faster in countries where tax rates were lowered. Instead of trickling down to the middle class, tax cuts for the rich may not accomplish much more than help the rich keep more of their riches and exacerbate income inequality, the research indicates."

Apparently this is news to the newly woke main stream media, where their analysists have been blinded by the light of neoliberalism for the past 40+ years. It is certainly not news to the tens of millions of workers in the US (and around the world) who have been fed the propaganda about "trickle down" while watching the purchasing power of their paychecks dwindle and the wealth of the few, skyrocket.

The failure of the Democratic Party in the US (and social democratic and labor parties in other nations) to understand this and to make it a priority to oppose the rising inequality, is undoubtedly the source of their decline and of the rise of rightwing "populism". By focusing the blame for the increasing divide between the rich and the rest of us on the "other", and appealing to fear and racism, the right has been able to win over significant sections of the working class to support white supremacy and nationalism. The MAGA crowd plays on the fear of working class whites that their status is under attack from below, when the truth is that both white workers and workers of color have been under attack from above.

What's missing in the report and the CBS analysis is any notion of the economic forces that are driving the accumulation of wealth at the top. For a greater understanding of that, we need to look at how the US economy has changed and how the federal government has encouraged and abetted this change over the past 40-50 years. The change has fundamentally altered the nature of capitalism and in the process led to runaway inequality. Raising taxes on corporations and the rich will do a little to slow rising inequality, but unless there are fundamental changes in the structure of the economic system itself, the vast accumulation of society's wealth in the hands of a tiny class of billionaires will continue. More on that in another post.