Reagan’s Trickle Down Economics Lie

Remember when Ronald Reagan cut taxes from 78% to 28% and promised corporations would use those tax cuts to create jobs and the economy would boom?  Do you also remember that the “boom” was the sound of the national deficit blowing up?  Tax cuts didn’t generate the booming economy Reagan promised and he ended up raising taxes numerous times to make up for the rising deficit. We’ve seen tax cut history repeating itself over and over, first with Bush II, then Trump and now the national debt has breached $38 trillion dollars.

Prior to Reagan’s tax cuts corporations could lower their tax rates by reinvesting in their companies and facilities by hiring more people, expanding, retooling, buying new equipment, research and development etc. Not only did this create a massive transfer of wealth from the poor and middle class with his tax cuts, his numerous tax increases adversely affected working families who also lost most of the deductions they enjoyed prior to Reagan’s tax cuts. In another blow to the middle class in 1982 Reagan legalized stock buybacks which enabled corporations to use their increased revenues from the tax cuts to repurchase their own stocks to further enrich their shareholders.  In the last ten years, US corporations have spent around $6.5 TRILLION dollars on stock buybacks.

So when I hear people say that if we raise wages corporations will raise prices to pass those increases on to consumers while lining their pockets with cash earned by underpaid workers.  Don’t be fooled, corporations afford to pay a fair wage they choose not to and flaunt their wealth with yachts, private jets, multiple mansions, trips to space etc.  Meanwhile their employees need subsidies for healthcare, housing and food. 

It’s time to stand up and speak out.  It’s time to elect politicians that not only recognize the value of working families (union and non union alike) but respects the work we do to building the roads, bridges, hospitals, schools, vehicles, etc that keep this country running.  If we stand together we have the power to change the course of this once great nation, we owe it to those of us in our golden years, our children and grandchildren and future generations to make a stand now before it’s too late.