Let us break this down

1. United States Government writes new investment tax laws 

2. That gives money to the wealthy 

3. Who in “theory” use the extra money to expand their business 

4. Which “trickles” down to create jobs

5. Which gives more money to the “working” middle class 

Update: The New GOP TAX bill has passed the house and the Senate and included the idea of trickle-down by cutting the corporate rate.

Now, let us piece it together; first, the United States writes new investment laws that lower tax rates for the 1%, this directly correlates into giving the 1% more money. Who then in “theory” have more money to expand their businesses and investments, that creates jobs. So this money trickles down to the working middle class of America and helps boost the economy. 

You may have heard of trickle-down economics in the news a lot this past election, or might even remember the burn that Hillary Clinton delivered to Donald Trump during the first debate calling it “Trumped up trickled down”. But what does this all mean and where did it come from? 

Trickle down economics is a “theory” that means giving tax breaks to the wealthy in hopes that they will create jobs and invest it back into the economy. This theory can be traced back as far as the great depression to Ronald Reagan’s administration and as recent as Donald Trump’s economic plans. 

The Good, The Bad, and The Ugly 

• In “theory” the plan sounds like it would work to spread wealth, and somewhat worked in the past (Good) 

• It has not been proven that trickle down economics alone has boosted the economy during the Regan administration, it is thought a combination helped (Bad) 

• In fact, income inequality grew, even though the average household income grew about 6%, there was an 80% increase in income for the top 1%, trickle up? (Ugly) 

At the end of the day this is nothing more than a theory, and like every theory, it needs to be proven, will it be good for the economy? We will find out, regardless now you know what it means and can be ready to see changes in the tax laws from Mr. Trump.