Thomas Sowell recently published a 14 page pamphlet: “Trickle Down” Theory and “Tax Cuts for the Rich”.
Thomas Sowell has pointed out on many occasions that no such economic theory, known as "trickle down", exists. You read that correctly, in all of economic literature no such theory exists. Sowell is correct, no such theory known as “trickle down” exists within the realm of economics. That "trickle down" and its companion "tax cuts for the rich" are merely notional political concepts and such misinterpretation goes all the way back to the 1920's.
Sowell has expressed the concepts which appear in the pamphlet many times, but this time around he expands upon the argument in that he clearly delineates between the change in behavior associated with taxes reductions and the mistaken conclusion of change in income flows to a particular class.
Also, left out of the discussion by many pundits, talking heads and commentators is Andrew Mellon. Mellon merely showed the paradox between lower tax rates and higher government revenue. Mellon’s book Taxation: The People’s Business is in fact a discussion of the change in behavior regarding taxes. (1)
However, Mellon has been vilified by many mainstream historians based on notional propositions without looking at the hard data. Mellon was correct and these particular historians are wrong. Maybe particular historians enjoy vilifying Mellon as he was FDR’s favorite target of: bring government powers to bear against an individual citizen due to FDR’s own personal notional vendetta.(2)
Link to Sowell’s recent publication appears below:
(1) Andrew W. Mellon, Taxation: The People’s Business, New York, The Macmillan Company, 1924.
(2) Burton Folsom Jr., New Deal or Raw Deal, NewYork, Simon and Schuster, 2008, pages 159-162.
Saturday, September 29, 2012
Wednesday, September 26, 2012
Simpson-Bowles Commission Lecture featuring Mr. Simpson and Mr. Bowles at Wake Forest University 09/25/2012
Simpson-Bowles [National Commission on Fiscal Responsibility and Reform] lecture was held last evening 09/25/2012 at Wait Chapel on the campus of Wake Forest University with the lecturers being none other than Mr. Simpson and Mr. Bowles.
The lecture was merely a rehash of their findings/recommendations from the original report issued by the commission. Nothing new that can‘t be found in the original report. Was more of an infomercial for their recommendations.
The failure to explain the underlying problem leaves them whining about being ““lashed out at“ by everyone who would suffer a cutback of their government sponsored privilege via the Simpson-Bowles recommendations. That is, the “lashed out at” is depicted as “woe is me” for telling the truth. Nay, nay. If they explained the underlying problem and the purposely built government privilege system then they would know such a system generates special interests that have their own politically built constituency that require the privilege to continue or else the special interest and associated constituency disappear. Hence the special interest and associated constituency are rational in lashing out as they want to retain privilege and the “woe is me” proposition misses the point completely.
Tuesday, September 18, 2012
Sunday, September 9, 2012
‘This morning I heard President Obama call for universities to lower their tuition rates so that “everybody in America can go to college.”
I am virtually certain that the President is not stupid enough to think that if tuition rates fell to zero,there would magically be enough room in the colleges for everybody in America. So I’ve got to believe that he’s purposely saying stupid things in order to appeal to stupid voters — the sort of voters, in other words, who probably don’t belong in college.
Saturday, September 8, 2012
Sunday, September 2, 2012
“Refrigerating coal-plant emissions would reduce levels of dangerous chemicals that pour into the air — including carbon dioxide by more than 90 percent — at a cost of 25 percent efficiency, according to a simple math-driven formula designed by a team of University of Oregon physicists.”