Trickle down

Do tax cuts to the wealthy benefit only the wealthy or do benefits trickle down to individuals who are not so well off? Democrats have been quick to point out how thoroughly disproven this trickle-down theory has become. There is one question that I would like to ask. Is the evidence really as strong as they claim?

Before going any further, I want to explain what I am looking for here. This is not going to be about supply-side versus demand-side economics. This isn't going to be about whether it's better to cut taxes for lower-level earners or the rich. I just want to know if anyone other than the rich can benefit from reducing taxes on wealthy individuals and large businesses​.

It's become clear that the Republican portrayal of trickle-down economics is wrong since tax cuts are typically used​ to help someone's bottom line. Savings to businesses have not been passed on to the consumer. No business has been quick to raise employee wages simply because they have more money. We haven't even seen the extra money used to add jobs.

What if we look in the opposite direction? What happens if we increase the cost of business. Businesses do not want such increases to cut into their profits, so they end up passing on the added cost to the consumer. In many cases, these businesses feel obligated to tighten up to make up for their tougher conditions. We have seen businesses look for ways to automate jobs. In this direction, we do see things passed from the rich and businesses to people who are not well off.

Imagine for a moment that a business has to face a requirement to raise wages to a level where they can no longer charge the same and remain profitable. They will increase the cost of their goods or services.

That might not be the best example since you could argue about the benefits of higher wages versus the added costs. If you look at taxes, it's the same thing. If you keep charging more, expenses will be passed on to the consumer.

Common sense should be sufficient to prove that trickle-down economics has at least some validity, so why isn't the evidence there? For starters, we are only looking one direction. Businesses are much faster in adding cost and taking away from employment than they are in providing savings. Additionally, the trickle-down component is usually insignificant in comparison to other factors. Pretty much every attempt to impose a policy along these lines has been bundled with other economic issues. On top of all of that, there are fluctuations that have nothing to do with these types of policies. As far as I'm aware, there have been no attempts to actually isolate the impact of so-called trickle-down economics.

In 100 years, what we did today to get to that future will no longer be relevant. This will almost certainly result in at least some impact of the costs to run businesses trickling down to others. How will we get there? If it's an increase in costs, it will hit faster. If it's a decrease, it would likely be a reduction in the rate costs increases for the consumer.

It seems to me that there is some validity to trickle-down economics, but there are other factors as well. Personally, I would rather pass laws that help the poor rather than the rich, as long as we take a simplistic approach that doesn't create oppression. I also will outright reject the Democrats' philosophy that they can always count on the rich to bail them out. Even if you disagree with me, you have to admit that there are limits to what the rich can pay. After all, you can't get away with taxing them over 100%. I also believe that complicated laws designed to help the poor can backfire since they don't have the resources to fully exploit every single law.