Tax cuts for the wealthy in some of the most affluent countries on the planet only served to help the rich, a study into ‘trickle-down economics’ found.
Research by David Hope of the London School of Economics and Julian Limberg of King’s College London in 2020 examined 18 developed countries from Australia to the United States, finding that the incomes of the rich grew much faster in countries where tax rates were lowered.
What’s more, rather than trickling down to the middle classes, the tax cuts accomplished little more than helping the rich keep more of their riches and exacerbated income inequality.
“Based on our research, we would argue that the economic rationale for keeping taxes on the rich low is weak,” Julian Limberg, a co-author of the study and a lecturer in public policy at King’s College London, said in an email to CBS MoneyWatch.
“In fact, if we look back into history, the period with the highest taxes on the rich — the postwar period — was also a period with high economic growth and low unemployment.”
The research has come to light after Donald Trump won a second term in office.
His victory added a record $64 billion to the wealth of the richest top ten people in the world – a list dominated by US tech billionaires – and could continue making them richer if his tax-cutting agenda is implemented in full.
On the campaign trail, he pledged to end the federal income tax in favour of tariffs and eliminate taxes on Social Security benefits, tips and overtime pay.
But according to Rolling Stone Magazine, if the past is prologue, there’s only one he’s certain to fulfil: massive tax cuts for the wealthy and corporations.
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