BOSTON (CBS) – Are you completely up to speed now on exactly what’s going to happen with tax cuts and reform under President Trump?
No? Welcome to the club.
That single page of bullet points released by the president’s advisers Wednesday tells us almost nothing about what’s to come. It’s a starting point for tricky negotiations with Congress that could well result in nothing changing. After all, that seems to be Washington’s method of operation over the past few decades.
But there is one thing we do know about the Trump tax plan – it worships at the shrine of trickle-down economics, the more than a century old theory that if the wealthy are made more prosperous, more of their wealth will find its way into the hands of the less-wealthy, primarily through the economic investments the wealthy make with their additional wealth.
Here’s another way of looking at it – trickle-down economics was known in the late 19th century as the “horse and sparrow” theory, that if you feed a horse enough oats, he will leave some behind on the road for the sparrows to feast on.
The Reagan tax cuts of the early 1980s are often cited as the prime modern example of trickle-down economics working; skeptics say the Reagan-era boom had more to do with monetary policy and the business cycle.
But here’s a basic question to keep in mind as this latest tax-cut debate unfolds – do you trust the chief beneficiaries to do the right thing with their newfound profits?
Will CEOs, in fact, turn their windfall into more jobs and better wages, or simply pocket the dough and head for the golf course?
Are the Trump tax cuts what the economy needs? Or just an invitation to an orgy of greed?