Talk:Trickle-down economics

Citations for contested content

Per above, i will use this section as a discussion of the contested lines above. Bonewah (talk) 14:32, 20 December 2023 (UTC)

• archive copy of bloomberg article. Does not support either claim. The article neither mentions any other study nor the laffer curve at all. Therefore, it does not directly support the contested claims. Bonewah (talk) 14:34, 20 December 2023 (UTC)

  Incorrect. It's not cited for the Laffer curve claim. But it does support the claim that, Last week two British scholars released a study (PDF) concluding that trickle-down economics doesn’t work. Trickle-down theory says cutting taxes on rich people will encourage them to work and invest more, ultimately creating jobs and benefiting everyone. In reality, it increases inequality while not having “any significant effect on economic growth and unemployment,” wrote David Hope, a visiting fellow at the London School of Economics Andre🚐 14:37, 20 December 2023 (UTC)

Sure, but that is not a line to which im objecting. Bonewah (talk) 14:41, 20 December 2023 (UTC)

• CBS new article covering the same study as bloomberg article above. Does not support either claim. Bonewah (talk) 14:40, 20 December 2023 (UTC)

  I don't understand your point. It's not cited for the Laffer curve, and it supports the claim that studies have shown that trickle-down doesn't work. Your arguments are invalid. Andre🚐 14:42, 20 December 2023 (UTC)

My point is that you need a citation for the claim that "As of 2023, a number of studies have shown that there is no obvious link between reducing tax burdens on the upper end and economic growth." You cant simply cite some studies and then draw broad conclusions not stated in the sources themselves for the same reason I could not say that "As of 2023, a number of studies have shown that there is positive relationship between reducing tax burdens on the upper end and economic growth." and then cite a bunch of studies. You can cite the studies, if relevant and consistent with the other rules of Wikipedia, but not to support the broad conclusion that I object to. Bonewah (talk) 14:49, 20 December 2023 (UTC)

Actually, no, it's a summary. We absolutely can if there's a consensus that this is an accurate summary, that due to the copious secondary sources interpreting that trickle-down is a myth, it's a myth and no study has shown any evidence of it. We can change the wording, but your argument is a bunch of bunk and unproductive and WP:1AM. Andre🚐 14:50, 20 December 2023 (UTC)

Looking at the archive (2), I noticed another citation which was discussed that seems relevant to this discussion. DN (talk) 20:16, 20 December 2023 (UTC)

References

"Despite the lack of practical evidence of the Laffer curve"? Excuse me?

What about Estonia and Jamaica? What about New Hampshire? What about the Tax Cuts and Jobs Act of 2017? Taxes went down and revenue went up. 181.194.252.59 (talk) 02:52, 8 March 2024 (UTC)

You seem to think that short term changes prove a long-term point. Track changes over several business cycles and think again.DOR (ex-HK) (talk) 10:16, 8 March 2024 (UTC)

The claim that there is some kind of 'lack of practical evidence of the Laffer Curve' is OR. The LC is a concept that can be found in any modern Econ textbook and we should defer to what those RS's say, not a few cherry picked newspaper articles. Bonewah (talk) 15:32, 8 March 2024 (UTC)

Didn't either of you bother to read Laffer curve? May you missed this in the lead?

One implication of the Laffer curve is that increasing tax rates beyond a certain point is counter-productive for raising further tax revenue. Particularly in the United States, conservatives have used the Laffer curve to argue that lower taxes may increase tax revenue. However, the hypothetical maximum revenue point of the Laffer curve for any given market cannot be observed directly and can only be estimated—such estimates are often controversial. According to The New Palgrave Dictionary of Economics, estimates of revenue-maximizing income tax rates have varied widely, with a mid-range of around 70%.

That clear enough for you? --𝕁𝕄𝔽 (talk) 17:07, 8 March 2024 (UTC)

Im not sure who the 'either of you' is supposed to be, but i would argue that the section you quoted supports my argument. High quality RS's dont make the kind of claims being made here about the LC. Most everything ive read from actual Econ reliable sources say that the LC is correct, but its not always possible to know where a tax is on the Laffer Curve. In other words, as a practical matter, lowering taxes might raise revenue, or it might lower it, but its difficult to know for sure beforehand. Bonewah (talk) 20:48, 8 March 2024 (UTC)

If it has no testable predictive ability, it is essentially pseudoscience. Practical evidence for it would include predictive ability. Otherwise, saying "A tax increase may either raise or lower revenue" isn't really saying anything at all; of course it might do one of those two things. An actual predictive ability would be to say "Under X circumstances, tax increases are likely to lower revenues, and under circumstances opposite those it will likely raise them." Then that claim could be tested to see if it's actually borne out in practice. That principle of falsifiability is critical to any theory. Seraphimblade ^{Talk to me} 22:08, 8 March 2024 (UTC)

Doesnt matter what you think of the Laffer Curve or it falsifiability, only what the best Reliable sources say. Bonewah (talk) 16:49, 11 March 2024 (UTC)

You are the one who stated that the best available sources state that it lacks predictive ability: Most everything ive read from actual Econ reliable sources say that the LC is correct, but its not always possible to know where a tax is on the Laffer Curve. So, I was going by what you claim they say. Seraphimblade ^{Talk to me} 16:55, 11 March 2024 (UTC)

Except that the reliable sources i quoted did not say anything about pseudoscience or falsifiability, you did. Bonewah (talk) 17:00, 11 March 2024 (UTC)

Of course, just like if a source says someone "was killed", we can conclude that they are dead, without the source explicitly saying "dead". If what you're asking for is sources which explicitly state that a theory must be testable and falsifiable in order to have validity, I can certainly provide those. Seraphimblade ^{Talk to me} 17:10, 11 March 2024 (UTC)

If it is explicitly about the Laffer Curve or TDE, then sure, provide away. If its some inference that you think is relevant, then not so much so. Bonewah (talk) 17:26, 11 March 2024 (UTC)

Furthermore, the texts say (and the Laffer curve says) that the effect of a tax regime is imprecise, that nobody knows where the Goldilocks spot is. It the equivalent of the medieval scholastics debating how many angels could dance on the head of a pin: it is a thought experiment with no expectation of real-world application. But it is also superficially attractive answer beloved of populists of left and right. It is not deterministic but that doesn't make it pseudoscience. --𝕁𝕄𝔽 (talk) 17:28, 11 March 2024 (UTC)

Is there something you would like to see changed in this article? If, so, can you specify what that is? Bonewah (talk) 14:44, 12 March 2024 (UTC)

Just as evidence that a reliable source agrees:

• Chris Giles (14 March 2024). "Searching in vain for the Laffer curve boost". Financial Times. Perhaps because Arthur Laffer is extraordinarily rightwing, the curve he drew on a napkin in 1974, suggesting lower tax rates increase revenues, has become a weapon of Conservative thinkers. This is far from ideal. If any government can find tax reductions that change behaviour sufficiently to raise receipts, everyone should be in favour. The problem is that genuine examples of the phenomenon are vanishingly rare.

"Chris Giles is the FT’s economics commentator. He writes a fortnightly column and the weekly newsletter, Chris Giles on Central Banks (sign up here). Previously, he was economics editor and served as a leader writer. He is an Honorary Professor of Practice at the UCL Policy Lab. Before joining the FT, he worked for the BBC, Ofcom and the Institute for Fiscal Studies. Chris loves numbers." (https://www.ft.com/chris-giles) That good enough? --𝕁𝕄𝔽 (talk) 21:27, 14 March 2024 (UTC)

Good enough for what? Are you hoping to include that quote? Bonewah (talk) 12:01, 15 March 2024 (UTC)

No, just affirming that the article does not need to change, that the OP's challenge is baseless. 𝕁𝕄𝔽 (talk) 17:59, 15 March 2024 (UTC)

Arthur Laffer's views only appeal to a minority of economists. As explained in the main article on Laffer:

• "Numerous leading economists have rejected the view that a tax rate cut of current federal U.S. income taxes can lead to increased tax revenue. When asked in a 2012 University of Chicago business school survey whether a "cut in federal income tax rates in the US right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut", none of the economists surveyed agreed and 71% disagreed. According to Greg Mankiw, most economists have been very skeptical of Laffer's contention that decreases in tax rates could increase tax revenue, at least in the United States. In his textbook, Mankiw states, "there was little evidence for Laffer's view that U.S. tax rates had in fact reached such extreme levels." Under the direction of conservative economist Douglas Holtz-Eakin, the Congressional Budget Office conducted a 2005 study on the fiscal effects of a 10% cut in federal income tax rates, finding that it resulted in a significant net revenue loss." Dimadick (talk) 12:08, 15 March 2024 (UTC)

This is not an article on the Laffer curve. Bonewah (talk) 12:52, 15 March 2024 (UTC)

References

Recent lead rewrite

The lead was recently rewritten in this series of edits to say that "trickle-down economics" is another term for "supply-side economics", a statement that obviously contradicts the body and numerous sources describing its usage as something that predates supply-side economics entirely. When I reverted it, it was reverted back in with the statement that it had been discussed; however, I can see no such discussion (nor can I imagine that such a WP:BOLD rewrite would have withstood any serious scrutiny, because, again, it directly contradicts the body of the article and most high-quality sources, relying entirely on lower-quality news sources.) As far as I can tell, the rewrite had no discussion at all. In fact, the only discussion around the time of the rewrite focused solely on the Laffer curve. The proposed rewrite to the lead contradicts most sources, severely damaged the quality of the lead, and fails to accurately summarize the entire article or the relevant sources per WP:LEAD. --Aquillion (talk) 17:26, 5 April 2024 (UTC)

The core problem i have with your rewrite is that it does not clearly state that TDE is a pejorative and not used by economists. I agree that the term predates Supply side econ and so the lead should reflect that. I think your edits are superior to what we had, but, again, i think we need to emphasize what the sources actually say, that TDE isnt an economic term and never has been. Ill revert my reversion and offer some tweaks to address my concerns. Thanks Bonewah (talk) 16:06, 8 April 2024 (UTC)

As I said 18 months ago, "Did someone forget that “trickle down” is a journalistic expression, and as such, entirely appropriate in a Guardian article? Please stop debating “trickle down” as if it were some kind of economic theory; it isn’t." DOR (ex-HK) (talk) 16:33, 8 April 2024 (UTC)

I agree. I have no problem with the lede rewrite, save that it does not spell this out, and, frankly, the last line is doing exactly what DOR (ex-HK) is saying. Which is, acting as if some study or whatever 'disproves' something that isnt an economic theory in the first place. Bonewah (talk) 15:38, 9 April 2024 (UTC)

US politics in the New Zealand section

Why are the 2016 candidates Trump and Clinton mentioned in the New Zealand section?? That should be in the U.S section instead. UniFanNumOne (talk) 16:28, 11 August 2024 (UTC)

Bit of History?

In my coastal town of 100 thousand people we had naval bases and a boatmaker and a sailmaker and schools and solicitors and pubs, tattoo artists, shops, government departments, national and local, light engineering works etc, etc. External Income was from taxes, yachtsmen, outside shoppers, customers of the engineering companies (e.g. Rolls Royce Aerospace) etc. The sailmakers and sailors and solicitors and teachers etc bought food and clothes and beer from the relevant places. The barmen too. The butchers shopped at the greengrocers', the greengrocers shopped at the butchers' and so on. Eventually all the money in town diffused out in this manner and reached equilibrium and in theory you could calculate how much there was and how much of it went where and what everyone ended up with. This was explained to me as trickle down theory in school in the early 1970s. Then someone 30-odd years ago defined it as "if we give as much money as possible to rich people, we'll all end up benefitting" That's not even a theory, it's just an assertion. FangoFuficius (talk) 15:21, 3 October 2024 (UTC)

From your description, the person explaining it in this way did not understand the trickle-down concept. What you have described is closer in theory to a closed economy. DOR (ex-HK) (talk) 20:14, 3 October 2024 (UTC)