Joe Biden took aim at so-called “trickle-down economics” in a recent tweet, with the President saying he is “sick and tired of talking about trickle-down economics. I ran for president to build the economy from the bottom up and middle out. And we’re getting it done.”
If Biden firing a shot at trickle-down economics sounds to you like he’s still aiming at Ronald Reagan — not at his contemporary adversaries — then you’re on to something. But the fact is that concerning trickle-down theory, Biden can fire a shot at Reagan and hit Trump and numerous House Republicans with the same ammunition, no scattershot necessary.
I’m sick and tired of talking about trickle-down economics.
— President Biden (@POTUS) March 7, 2023
I ran for president to build the economy from the bottom up and middle out.
And we’re getting it done.
Because for all the changing of the guard in the GOP — from establishment Republicans and Reagan acolytes to full-steam-ahead MAGA insurrectionists — tax cuts for the rich and their ballyhooed trickle-down tendencies still guide GOP fiscal policy. Whether the Republican is still in a Brooks Brothers suit or has transitioned to animal pelt and horned helmet, they still don’t want the rich to be taxed.
On that there hasn’t been much change, from Reagan to Trump.
Trickle-down economics persists as the enduring idea that if the government keeps its hands off the wealthy’s money, the wealthy will in turn create jobs and do other creative things for the economy that will make it so robust and innovative that the prosperity will trickle down to the poorest citizens in the form of both higher income and a higher standard of living.
The comedian Will Rogers said probably the sagest thing about where the money is best put — anywhere you put it, the money will end up in the same place, Rogers knew. Rogers said of President Hoover: “He didn’t know that money trickled up. Give it to the people at the bottom and the people at the top will have it before night.”
[Background Notes for comparison: Both Trump’s and Reagan’s tax cuts were focused on reducing taxes for businesses and the wealthy. Reagan’s tax cuts lowered the top marginal income tax rate from 70% to 28%, while Trump’s tax cuts lowered the corporate tax rate from 35% to 21% and reduced individual income tax rates across the board. As a result of both, deficit spending increased.
During Reagan’s presidency, the federal budget deficit grew significantly. Despite cutting some spending, the tax cuts he implemented resulted in a reduction in government revenue, which contributed to the growing deficit. The deficit peaked at $221 billion in 1986, which was at the time the largest deficit in U.S. history.
Similarly, under Trump, the federal budget deficit also increased. The Tax Cuts and Jobs Act of 2017 reduced tax revenues, while federal spending continued to increase, leading to a significant increase in the budget deficit. The deficit increased from $585 billion in 2016, the last year of the Obama presidency, to nearly $1 trillion in 2019.
Both Reagan and Trump argued that their tax cuts would stimulate economic growth and ultimately increase government revenue, which would offset the revenue lost due to the tax cuts. However, this did not occur to the extent that they had hoped, and deficits increased as a result.]
