Summations Only

No. In fact, the evidence suggests that Laffer's crude curve resembles nothing like the actual curve. In fact, the probably peak level lies somewhere around a 70-80% tax level - way above the taxes imposed in any developed nation. The evidence arising from tax increases supports this, where 1% increases in tax levels produce something like a .8-.99% increase in tax income, depending on the tax.Note that this only applies to taxes applied over the longer term, avoidance in the short term is easy - q.v. the 50% tax rate in the UK. It's generally accepted that there is a point at which increasing taxes no longer produces increases in tax income. And it's generally accepted that raising taxes has an effect on economic output. What's not at all agreed upon is how exactly these factors interact and at what levels.

The trouble with the question is how you want to look at it. It's likely that the majority of people receive a material uplift in their living standards through trickle down economics. However, there's two problems with this, firstly (a) the alternative is not stasis, it's a different model of economics - one that produces bigger uplifts, and (b) material increases aren't all that relevant to the more important question of quality of life and wellbeing.Tackling (b) first, there is a massive (and growing) body of evidence that inequality is bad for society. It's especially bad for the people at the bottom, but it's bad for people in the middle and near the top too. Look at health outcomes, life expectancy, crime, teenage pregnancy, happiness, alcoholism, drug use, death by violent crime, domestic abuse - basically, you name a bad thing, it correlates positively with inequality. And, yes, correlation is not causation, but there's a decent (and growing) body of research that's demonstrating causal links between inequality and these effects. See The Spirit Level for a pop sci outline.This all means that even if Trickle Down Economics works economically, it would still fail socially because it drives up inequality.Onto (a), you can easily see the effects of the concentration fo wealth, look at London house prices and the toxic effect they've had on the UK's housing market as a whole. The large accumulation of wealth at the top drives up prices where they want to live, temporarily creating wealth for the current owners, who tend then to move away, taking their inflated house values with them to buy houses elsewhere and easily out-competing local buyers. This whole toxic cycle means that while incomes may go up in the middle, the value goes down as more money gets sucked into overpriced buildings and the lower paid are simply priced out.Quite apart from toxic effects of the rich, such as these, the notion that the rich as "wealth creators" is utterly laughable. There was a study a while back that reckoned that for every pound they were paid, investments bankers destroyed eleven pounds of value in the economy, whilst every pound a cleaner was paid created seven. I can't find it right now, so I don't know how it was worked out. But it stands to reason. When someone goes to a factory and makes a nut, they create value. The nut is more valuable than raw metal. When someone sells a nut they create value by providing easy access to nuts to nut users. When someone takes that nut and uses it to make a chair, etc...Notice how it's people doing things that are creating value, and they don't need to be making things, providing services also has value. The rich aren't the ones making the things, or providing the services; they're simply organising others to do this and taking a cut. That's not unreasonable, businesses need management, etc. - but it can be taken too far - and it's quickly obvious that the ones at the top aren't creating the wealth, it's their workers doing that.What's more, money held by the Rich is just plain less valuable. The economic value in money is unlocked only when it is used. Fundamentally, value can only be created when a transaction occurs: someone has to buy something. Give a pound to a poor person and they'll probably spend it straight away. Moreover, they'll likely spend it in a local shop (or pub or whatever) where it'll be spent by the shopkeeper soon after. The money has a high work rate because it's rapidly passing through multiple transactions. The rich man, on the other hand, isn't as likely to spend the money straightaway but rather to invest it. Investment is important, of course, but it isn't as important to the economy as actual transactions where value is created. The work rate of the money of the rich is lower, and thus it creates less wealth.

This is an addressable problem, though. Your country is more corrupt than mine, for example, whilst mine is substantially more corrupt than, say, Norway. It really isn't.The question is whether setting up the structures of the economy so that the wealthiest are free to accrue as much wealth as they can is beneficial to people in general. That's what trickle down economics is about. You don't need to alter the public-private balance of wealth and taxation to do that. The level to which we wish to fund the government is independent of trickle-down economics.Measures such as higher minimum wages, greater support for co-operatives, better worker rights, German-style union involvement in management, etc. all have nothing to do with increased taxation but do operate opposite to principles of trickle-down economics and decrease inequality.Now, personally, I'd go all for more progressive taxation on the rich to pay for less tax on the lower half of society, massive hikes in inheritance tax and taxes targeted at difficult to relocate wealth, as well, but that doesn't have to be part of an alternative to trickle-down economics.

Hi Percy, What makes you think that those best at accruing wealth (i.e. the rich) are also the best at wealth creation?Note: this isn't private vs. public money; it's distribution of wealth among the private sector.

I don't think that describes the theory of trickle down either.From wikipedia

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Proponents of these policies claim that if the top income earners are taxed less that they will invest more into the business infrastructure and equity markets, it will in turn lead to more goods at lower prices, and create more jobs for middle and lower class individuals.

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I've bolded what I consider the key part. Trickle down economics isn't about wealth flowing down the hill, it's the idea that investment by the rich will create jobs for the poor. The rich man builds a new factory, the poor man gets a job in the factory. The rich man invests in a new computer games startup, the middle class graduate gets a job as a games programmer.It's about the notion of money freed for investment will boost everything so much that everyone gets better off as a result.Key to it is the notion that invested money is the best money for the economy. This is simply bollocks. Spent money is better for the economy that invested money. A business that takes a fiver for a sandwich is better off than a business that borrows a fiver to buy the ingredients for a sandwich.

Why do you think that can be accredited to Reagan's tax cuts in particular? Especially given the radical changes in technology and global politics that occurred during that period?

Yet many countries successfully tax the rich to much higher levels than the US, and nearly every developed nation is less unequal than the US (my own country scores badly here, but not as badly as yours).The idea that the rich are untouched and untouchable is rubbish. Also, frankly, the ultimate sanction of the rich is to leave to which I say "don't let the door hit you on the way out". The ultra-rich are just plain too harmful to allow the current situation to continue.

Yeah, we suck. Look to Europe; especially the most successful nations. I reject the notion, fundamentally, that we can't close tax loopholes. Well, gosh, maybe we should reform the system so they don't have so much influence, then?

What absolute drivel.That's bordering on Not Even Wrong. It's so wrong I don't even know where to begin.

Hi Percy, I don't have any great interest in blaming scapegoats. I want to introduce straight-forward policies to pull down inequality. German-style worker involvement in company management, Australian-style sector based minimum wages, and the deminishment of big money in politics would all be a good start. This is just nonsense, Percy. Capital never does anything. You've mistaken ownership for work.Let's say I make a chair. That creates wealth because I've taken something of little use and value - some wood - and created something that is of use and value, because you can sit upon it and it looks nice. People want chairs in their homes.According to you, if I perform the same work for a company, I've no longer created any wealth. This is rubbish. If I make a chair for Percy's Tables and Chairs, it's still my work created the wealth; it's just the ownership of that work that's different.Now, in a good situation this is a perfectly equitable and reasonable arrangement. My chair making skills and effort creates wealth; wealth now owned by Percy's Tables and Chairs. The company takes that created wealth, and uses it for various things, but one part of it is paying me for my labours. Returning some of the created wealth to me.This works for me because I like having a regular salary, topped up by a few perks, rather than having to worry about getting my chairs to customers, managing wood orders, advertising my chairs to potential customers, and so on. The people doing these things, of course, are also creating wealth - although more indirectly. And the company also owns their created wealth and returns some of that wealth creation to them.The idea that owning the created wealth is the same thing has having created that wealth is just plain wrong. The wealth is created by the chair being made - the thing I did - not the movement of capital.Edited by Mr Jack, : Missed a word out

Still wrong. The company does not create any wealth. You're misattributing it again. The wealth I'm paid is not equal to the wealth I've created. It can't be if the company is to make any profit.You're right that the additional $50 is not created by me; but you're wrong in thinking it was created by the company. No, it was created by the people who took it to the store, who organised the marketing, who negotiated with the distributers and shopkeeper and so on.The wealth creation happens, and can only, happen when people take actions. The wealth is created by those actions. Now, the wealth created is owned by the company - and may only be possible within the context of the company - but that isn't the same thing as the company creating that wealth. At most, it enables the wealth to be created.Any money the company pays me is not created, but instead passed on from the creation of wealth I've achieved, or enabled, in working for the company.(Please, see also Message 393 before replying to this message)Edited by Mr Jack, : Added link to 393.

Hi Percy,After further consideration I've come to the conclusion that your view is valid. You can validly view the wealth creation of workers as their selling their time to the employer, and that act being the one that creates wealth. This is, from an economic accounting point of view, an equally correct analysis.However, I still consider such a view to be inferior to the more materially accurate view that considers the work done to be the wealth creation step and the salary to be paid from the proceeds of that wealth creation. It is more useful because it models more accurately how the company makes money, and where that money is made.