Do Tax Cuts for the Rich Create Jobs?

The (You’d Think Predictable) Economic Consequences of Cutting Taxes for the Rich

Photo by Chenyu Guan on Unsplash

Tax cuts are in the news again and neoliberal, trickle down economics seems to be coming in the back door disguised as ‘reinvigorating the economy’ to deal with the cost-of-living-crisis — it’s like the 80 and 90s didn’t happen.

Time to dust off the policy evidence for cutting taxes to boost growth. Does leaving more money in the hands of the rich increase productive investment i.e. the creation of jobs, growth and infrastructure, or does it not.

Let’s quickly review the paper above which is making the rounds on social media. As the paper points out, the publics perception of how the economy works influences their preference on how the rich are taxed.

In short, the papers answer to the question of ‘does lowering taxes for the rich produce economic growth for all’, is no. Although taxes increase the wealth of the rich, that money stays with the rich and doesn’t get reinvested nor trickle-down.