Trickle Downers

The Prospect's ongoing exposé of the folly, dysfunctions, and sheer idiocy of feed-the-rich economic policies.

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.

Trickle Downers

What Taxing the Rich Could Yield

America’s 15 wealthiest families are worth a combined $618 billion. That’s not good for our economy—or our democracy.

From left, Melania Trump, Ivanka Trump, Eric Trump, and Donald Trump Jr. trickle-downers_54.jpg T he New York Times investigation into the Trump family’s financial misdeeds recently revealed what had been obvious to most: The president is no self-made man. Like so many bombshell stories about the president, this story has been largely overlooked as new and more flagrant Trump indignities erupt nearly every day. Yet the tactics that the report shines a light on are hardly peculiar to the Trumps. Many wealthy families use similar tactics to stockpile their wealth and keep it from taxation that could reinvest it to meet the nation’s needs. And in doing so, these families keep building wealth with which they can wield political power. A new report from the Institute for Policy Studies (IPS) takes a close look at the billionaire multi-generation families who wield that power—the American dynasties. Taking their cue from the Forbes 400 list of the wealthiest people in the United States, the...

Trump’s New Opportunity Zones Look Great for Investors

Whether they’ll actually help their intended beneficiaries—poverty-stricken neighborhoods—is a lot less clear.

AP Photo/Julio Cortez A man walks by a closed restaurant along Bergen Street in a so-called opportunity zone in Newark, New Jersey. trickle-downers_35.jpg L ike kids before a piñata, investors and real-estate developers have been lining up to cash in on a new suite of tax cuts for investments in low-income areas, known as “opportunity zones.” Now, with the release of much-anticipated guidelines by the Trump administration, the party can finally begin. The opportunity zone program, one of the rare provisions in last year’s Republican tax overhaul to receive some Democratic support, is the latest spin on a decades-old policy intended to attract capital to economically distressed areas by offering a range of financial goodies, such as tax benefits and subsidies. With sufficiently lucrative incentives available, the theory goes, wealthy investors will happily put their dollars into small businesses, local infrastructure, and housing in areas otherwise starved of investment. Sounds like a...

Work Requirements Seep into Policy, the Evidence Be Damned

And Trump counts on this failed set of policies to cut vital public assistance.

(AP Photo/Jacquelyn Martin)
(AP Photo/Jacquelyn Martin) House Majority Leader Kevin McCarthy, House Speaker Paul Ryan, and House Majority Whip Steve Scalise on September 13, 2018 trickle-downers.jpg O n Tuesday, Senate Majority Leader Mitch McConnell revealed what many had already predicted: Republicans would place blame for the deficit, which was ballooned by the $1.5 trillion Republican tax cut of 2017, on public assistance programs. McConnell told Bloomberg News that the deficit is “very disturbing, and it’s driven by the three entitlement programs that are very popular—Medicare, Social Security, and Medicaid.” Indeed, conservatives are already putting forth policies to trim social programs, even as they are expanding work requirements to keep millions of low-income Americans from receiving assistance, and appointing people to administer such programs who have histories of mutilating them. In their zeal to impose work requirements, they are serenely undaunted by the vast body of research that shows such...

Think the GOP Tax Cut Was for the Rich? Actually, It Was for the White and Rich.

At nearly every point on the economic spectrum, a new report documents, it helped whites more than people of color.

(Photo by Olivier Douliery/Abaca Press/Sipa via AP Images)
(Photo by Olivier Douliery/Abaca Press/Sipa via AP Images) Republicans wave to President Trump at an event to celebrate the passage of the 2017 Republican Tax Act on the South Lawn of the White Hosue on December 20, 2017. trickle-downers.jpg T he $1.5 trillion tax cut signed into law last December by President Trump is not only widening the economic gap between the rich and everyone else, but also between white Americans and people of color. That’s according to a new, first-of-its-kind analysis of the 2017 Republican Tax Act by the Institute on Taxation and Economic Policy (ITEP) and Prosperity Now, a nonprofit advocacy group for low-income households. Using an economic model created by ITEP, the report drills down on the racial implications of the Republicans’ handiwork. The report’s authors found that racial inequities are a feature of the tax law, not a bug—Trump’s tax cuts champion Americans with existing wealth over those struggling to create new wealth. Of the $275 billion in...

D.C. Council Repeals Wage Bump for Tipped Workers, Will of Voters Be Damned

Washingtonians voted for an initiative raising wages. Their elected representatives just nullified that vote.

(Shutterstock)
(Shutterstock) trickle-downers.jpg W ashington, D.C., lawmakers voted 8 to 5 on Tuesday to repeal a voter-passed ballot measure known as Initiative 77—the will of their constituents be damned. Initiative 77, which received 55 percent of the vote in the June primary election, would have gradually raised the minimum wage for tipped workers in the District, starting with a modest increase on October 9, eventually reaching parity with the city’s minimum wage in 2026. Currently, employers are allowed to pay tipped workers less than the District’s $13.25 minimum wage, so long as their tips make up the difference. The council’s vote snuffed out, at least temporarily, what had become a major flashpoint in local politics, one that pitted restaurant owners, restaurant lobbying groups, and high-earning servers and bartenders against worker-advocacy organizations and lower-earning tipped workers. In a 16-hour public hearing in September, opponents of Initiative 77 warned that the measure would...

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