January 28, 2008 by William Hennessy
Classes and Tides
Back in the 1980s, it was fashionable for the left to scoff at Reagan’s economic notion that a rising tide lifts all ships. Liberal economists and politicians sneeringly referred to “trickle-down” economics as a justification for the rich to keep the poor poor. Every responsible economist knew Reagan was right, but the left in America had no accountability. Many Americans, by 1986, believed “trickle-down” economics pure evil.
Today, MSNBC took it all back. With a terrorizing headline, MSNBC announced, “Working poor more pinched as rich cut back.” Here’s the meat of the article:
Cutbacks by the wealthy have a ripple effect across all consumer spending, said Michael P. Niemira, chief economist at the International Council of Shopping Centers. That’s because American households in the top 20 percent by income — those making at least $150,000 a year — account for about 40 percent of overall consumer spending, which makes up two-thirds of economic activity.
Wow! From that admission by a liberal news organization, almost everything we on the right have said about tax cuts turns out to be true:
- A tax cut for the rich benefits the poor disproportionately. While the rich use tax cuts to buy luxuries, the purchase of those luxuries allows the poor to buy necessities. Given a choice, ration people choose necessities over luxuries, so cutting taxes for the top 20 percent of tax payers lifts the bottom 20 percent out of poverty.
- Cash in the hands of people at the top of the income pyramid works its way down to the bottom.
- Tax cuts for the poor a less effective at boosting the economy than tax cuts for the rich. This simple math. A family of four paying $1,000 a year in taxes that receives a 10 percent tax cut has an extra $100 to spend. The same family of four paying $20,000 a year in taxes gets $2,000 in additional spendable income. That $2,000 will eventually reach the bottom, multiplied a factor of at least 1.5. So the poor get $3,000 if the rich get a $2,000 cut. That’s $2,900 more than if the poor received a 10 percent tax cut.
- Everything liberals say about taxes, spending, and economics is a lie. (Okay, this article doesn’t prove that, but 44 years of paying attention to what liberals say does.)
So remember, the best way to help the poor is to get rich, vote Republican, and demand a tax cut.
Michelle Malkin finds that NJ Gov. Corzine hates the poor.