this post was submitted on 20 Oct 2024
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50 years of tax cuts for the rich failed to trickle down, economics study says (www.cbsnews.com)
submitted 1 month ago by [email protected] to c/[email protected]
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geteilt von: https://feddit.org/post/3946115

Aus Mastodon von Michael Albert übernommen:

Britische Forscher haben herausgefunden, dass Steuersenkungen für Reiche keinen (Trickle-Down-) Effekt auf den Wohlstand eines Landes haben. Die Reichen werden lediglich reicher und die Ungleichheit steigt.

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[–] [email protected] 24 points 1 month ago (5 children)

Trickle down economics is also illegal in the USA. It was attempted by Ford Motors in 1919.

Dodge v. Ford Motor Co. (1919), is a case in which the Michigan Supreme Court held that Henry Ford had to operate the Ford Motor Company in the interests of its shareholders, rather than in a manner for the benefit of his employees or customers.

Ford declared:

My ambition is to employ still more men, to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes. To do this we are putting the greatest share of our profits back in the business.

...in the opinion written by Russell C. Ostrander argued that the profits to the stockholders should be the primary concern for the company directors... The court therefore upheld the order of the trial court requiring that directors declare an extra dividend of $19.3 million. It said the following:

A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end and does not extend to a change in the end itself, to the reduction of profits or to the nondistribution of profits among stockholders in order to devote them to other purposes.

The whole idea of trickle down economics was never going to happen because the first company that would have tried it (again) would have just lost in court and the CEO that authorized it would be fired and removed.

[–] sylver_dragon 11 points 1 month ago

Even beyond the idea of CEOs acting in the financial interest of shareholders, the whole premise of "trickle down" is faulty. Businesses do not hire or raise wages just because they have money. The only reason for a business to hire is because they have work which needs to get done and they cannot get it five with their current workforce. No matter how flush with cash they are, they aren't going to hire unless they have extra work or they anticipate having extra work. The same with raising wages. Unless they cannot hire the people they need or they need to retain certain workers, wages are not going up.

Money "trickles up". When consumers have money, they spend it and it goes into businesses and the pockets of shareholders. In order to keep the velocity of money up, those shareholders need to be taxed to get that money moving again. And the tax cuts for the rich break that cycle.

[–] [email protected] 5 points 1 month ago

Early Ford hated bankers and investors. He did some brilliant moves to cut them out and early Ford really seemed to be pro worker. Later Ford was not the same man.

[–] [email protected] 4 points 1 month ago

Ford declared:

My ambition is to employ still more men, to spread the benefits of this industrial system to the greatest possible number, to help them build up their lives and their homes.

Somehow I have a hard time believing Ford when he says this lol

[–] [email protected] 1 points 1 month ago* (last edited 1 month ago)

had to operate […] in the interests of its shareholders, rather than in a manner for the benefit of his employees or customers.

Sounds like US, alright.