FILE - In this Oct. 22, 1986, file photo, lawmakers watch closely as President Ronald Reagan signs into law a landmark tax overhaul on the South Lawn of the White House in Washington. From left, are: Senate Majority Leader Bob Dole of Kansas, Rep. Raymond McGrath, R-N.Y.; Rep. Dan Rostenkowski, D-Ill., Rep. Frank Guerini, D-N.J.; Sen. Russell Long, D-La.; Rep. William Coyne, D-Pa., and Rep. John Duncan, R-Tenn. The fundamentals of tax overhaul were strong some 30 years ago. Reagan, pushed the landmark 1986 measure. Powerful and experienced congressional leaders shepherded the legislation with bipartisan support. Key players had established, trusting relationships. The situation facing President Donald Trump features none of those advantages. (AP Photo/Bob Daugherty, File) (AP)

Why we need rise-up economics, not trickle-down

Tax cuts to the rich and big corporations do not lead to more investment and jobs


robertreich.org
March 3, 2018 2:59PM (UTC)
This originally appeared on Robert Reich's blog.

How to build the economy? Not through trickle-down economics. Tax cuts to the rich and big corporations don’t lead to more investment and jobs.

The only real way to build the economy is through “rise-up” economics: Investments in our people — their education and skills, their health, and the roads and bridges and public transportation that connects them.

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Trickle-down doesn’t work because money is global. Corporations and the rich whose taxes are cut invest the extra money wherever around the world they can get the highest return.

Rise-up economics works because American workers are the only resources uniquely American. Their productivity is the key to our future standard of living. And that productivity depends on their education, health, and infrastructure.
Just look at the evidence.

Research shows that public investments grow the economy.

A recent study by the Washington Center for Equitable Growth found, for example, that every dollar invested in universal pre-kindergarten delivers $8.90 in benefits to society in the form of more productive adults.

Similarly, healthier children become more productive adults. Children who became eligible for Medicaid due to expansions in the 1980s and 1990s were more likely to attend college than similar children who did not become eligible.

Investments in infrastructure — highways, bridges, and public transportation — also grow the economy. It’s been estimated that every $1 invested in infrastructure generates at least $1.60 in benefits to society. Some research puts the return much higher.

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In the three decades following World War II, we made huge investments in education, health, and infrastructure. The result was rising median incomes.

Since then, public investments have lagged, and median incomes have stagnated.

Meanwhile, Ronald Reagan and George W. Bush’s tax cuts on the top didn’t raise incomes, and neither will Donald Trump’s.

Trickle-down economics is a hoax. But it’s a convenient hoax designed to enrich the moneyed interests. Rise-up economics is the real deal. But we must fight for it.


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America Big Corporations Economics Economy Global Investments Public Investments Robert Reich Roi Tax Cuts




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