Trickle, Shmickle

The best way to spur growth is to help the poor, not the rich.

- Peter Coy

“Trickle-down economics” is a term liberals use when they want to disparage tax cuts for the rich. So on Nov. 9, when Fox News anchor Maria Bartiromo asked Secretary of the Treasury Steven Mnuchin at an Economic Club of New York luncheon, “Do you still believe in trickle-down economics?” the prudent answer was obvious: “Of course not, Maria. That’s not what the Republican tax plan is about at all.”

Instead, Mnuchin said, “Uh, uh, I do.” To be sure, Mnuchin is gaffe-prone. He was last spotted on Nov. 15 happily gripping a big sheet of uncut dollar bills while his wife, actress Louise Linton, struck a Cruella de Vil pose beside him. As the journalist Michael Kinsley once said, a gaffe is when a politician tells the truth. And the truth is that Republicans have gone all in on the notion that if they pour tax cuts onto the very rich, the benefits will flow down to the mere rich, and from them to the middle class, and finally to the poor. Like a Champagne tower at a swanky wedding reception.

There’s a reason trickle-down is suddenly trickling from everyone’s lips. The Urban-Brookings Tax Policy Center calculates that the Senate’s version of the Tax Cuts and Jobs Act would give the biggest benefits to people just below the top 1 percent of incomes in 2019 and 2025, measuring benefits as the percentage change in each group’s after-tax income. By 2027, as some of the law’s provisions expire and others remain, the top 0.1 percent would be the biggest beneficiaries, the center says. (To be fair, this preliminary calculation doesn’t take into account potential economic growth effects from the tax changes.)