Ronald Reagan's Trickle-Down Economics

978 Words4 Pages
Trickle-down economics began in the 1980’s under President Ronald Reagan. He believed that cutting taxes would stimulate the economy, create more jobs, and help many American families. Reagan cut taxes, for the top earners, from 70% to 28%. For those who made $500,000 a year, a 70% tax would reduce his or her annual income to $150,000, which is a significant decrease; however, the United States had a progressive tax system that stated that the more you make the more you pay in taxes. The reason for high taxes on top earners is to help fund necessary U.S. spending, which has increased excessively. Trickle-down economics increased income inequality and lowered the percent of Americans in the middle class. This economic policy was established to help…show more content…
As previously stated, trickle-down economics has had a negative impact on the middle class. The median income has flat lined and dropped while the top 1% has risen substantially. Since the top 1% and corporations are making record profits, middle class incomes should have risen as well, but they did not. The whole point of trickle-down economics was to make the rich richer. From 1980 to today, Americans have been working hard, as usual, but wages have stagnated, while the top 1% has grown dramatically. Another example of the failure of trickle-down economics is shown in the “recovery” under President Obama. During the so called recovery, all of the economic gains went to the top 1%, as middle class incomes dropped. Also, under George H.W. Bush, the United States created one million jobs and then we lost the jobs during the recession. President Obama has created many jobs but they are low wage jobs. Many Americans also state that they have simply stopped looking for jobs. There is no concrete, undisputable, or absolute evidence that trickle-down economics works for the middle

More about Ronald Reagan's Trickle-Down Economics

Open Document