We have long heard the benefits extolled of trickle-down economics, from no less than Hoover, Reagan, Bush I, and Bush II - arguably four of the worst economic President's of all time. I'll give Reagan the cold war, but not that he fought it on the backs of workers while the wealthy got wealthier.
Trickle down economics posits that if all tax cuts are given to the wealthiest individuals and corporations, then they will spend that money investing in new jobs and increasing profits and wages for their workers. Thus, the bolus of money at the top will slowly trickle down to every American.
The problem is, of course, that is doesn't work. We've given boluses of money to CEOs and billionaires and do you know where it goes?
Right into the CEOs pockets. Ever since the restructuring of the tax code by Reaganites, the pay of CEOs has gone through the roof. Ashamedly, this increase has continued apace through the Clinton years where a set of balls would have stood up to the Republican Congress. Of course, the W Recession knocked that pay down as many companies went bankrupt due to his economic policies. What hasn't increased since the Reagan era?
Worker pay. You'll notice that worker pay is more or less flat. If you adjust the minimum wage into real buying power what you see is even more pathetic.
Minimum wage is at its lowest since the 1950s, and before that it goes back to WWIIish wages. Although the radical right hasn't had any desire to return our social systems to the 1950s, as they promise their base, they have seen fit to shrink their wages back to Leave It To Beaver scale.
Artesian economics is the opposite of Trickle-Down and it is a policy that would actually work. Do you know what an artesian well is?
In a site where the water table is higher than ground level, puncturing extremely hard rock will result in a fountain of water flowing to the surface. Thus, with artesian economics, tax cuts are all targeted to the lowest earners in our country. Tax rates for corporations and those making, let's say, $200,000 individual or $400,000 for a family are much higher. If this plan were to go through, then I believe we would want to keep the capital gains tax low - for reasons you will see shortly.
Now, the poor and lower-middle classes have almost no taxes, so what are they going to do with their money? This is an important concept. We know what the wealthy do with their money, they keep it. Lots of it goes offshore. The beneficiaries of artesian economics will SPEND their money. Where? Well, it will go to the local supermarket, hardware, video store, coffee shop, diner, and other local companies or national chains located nearby. Very little if any will go outside the country or be stashed away - although this could help keep Americans OUT of debt so the national savings would actually improve by moving out of negative territory.
This money is starting to push up that pipe in the ground. Because, they have invested it in companies that work - not Enron but Ernie's garage. Not Pets.com but Target or Costco. Therefore the small business owner makes more money, he has more business, and he hires more staff. This tax cut has created LOCAL jobs and will also create more production jobs because Americans are buying more real stuff. Now, what about the wealthy. Well, they have to invest their mega-bucks somewhere. But, now instead of investing in crap-shoot companies, they would be smart to invest in companies that will actually pay off - including things like Amazon.com and other internet companies that provide a service people actually use. From these investments in solid companies they will make profits, which I think should be taxed at a low level. One reason I have a problem with the investment tax now is that it benefits those who are already benefiting the most from the trickle-down bullshit economy. In artesian economics these people would pay the brunt of the taxes, but would receive the benefit of low taxes on their investments.
Sure there would be ways around this. Loopholes. But, loopholes can be fixed. One way would be to make the tax code a flat tax along with this system. That way every person making between $200K - $2 billion would pay the same rate on any income that was given to them, whether it is cash or stocks or cars or whatever.
This system would actually help Americans instead of just talking about helping while stealing their wallets. That is the biggest difference between a Progressive plan and the plan of Republicans.