Guest column: Responsibility trickles down, not wealth

The Daily Ardmoreite
Tony Choate

Another study has confirmed that trickle-down economic theory does nothing more than increase economic inequality.

That economic reality is important for members of Congress to remember as they consider the social spending bill designed to enhance the quality of life of working families.

While the phrase “trickle-down economics” may not be used as often today as it was when it was made popular by President Ronald Reagan in the 1980s, the idea persists.

In essence, the idea behind trickle-down economic theory is that tax cuts for the wealthiest will enable them to invest more, creating jobs and economic benefits for workers and the middle class.

In reality, trickle-down economic policies, which include massive tax cuts for the wealthiest Americans, have contributed to massive economic inequality. These policies helped create an economic situation where one percent of Americans own 32.3% of the wealth in this nation.

Those same policies have decreased the percentage of income earned by middle income workers from 62% in 1970 to 43% in 2018. During those same decades the percentage of income earned by upper income earners has increased from 29% in 1970 to 48% in 2018.

Meanwhile, lower income earners stayed at about 10% of total income.

Elon Musk recently made $36 billion in one day, which is 500 million times more than a worker earning $9 per hour earns in one day.

Despite the overwhelming evidence, some continue to argue that these policies are good for the economy and workers are better off because of a booming economy.

Even if that were true, the argument ignores the most important aspect of trickle-down economic policies.

These policies allow the wealthy to control funds that should be directed to Constitutional responsibilities outlined in the preamble.

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

As Americans we all share a responsibility for funding our law enforcement, judicial system, national defense, infrastructure and the other things we do to “promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.”

Contemplating the possibility of having to pay more in taxes, Elon Musk recently posed the following question on social media, “who is best at capital allocation — government or entrepreneurs.”

That is an apples-to-oranges comparison because entrepreneurs are focused solely on profit, while government concerns itself with national defense, roads, bridges, water systems, law enforcement and promoting the general welfare.

Trickle-down economics theories have long been accompanied by the idea that government should be run more like a business. While that may sound good in theory, business and governments have very different purposes.

Elon Musk is excellent at allocating resources, including at least $5.6 billion from American taxpayers, to produce a profit, which is the core purpose of business.

In sharp contrast to business, the core purpose of our government is to promote the general welfare.

Profits produced by entrepreneurs do virtually nothing to provide for the common defense, fund infrastructure, secure the Blessings of Liberty, or promote the general welfare.

Taxes fund those collective responsibilities.

While most Americans understand and accept our individual duty to pay taxes to contribute to national defense, roads, bridges, water systems, law enforcement, and other collective responsibilities, many also believe they pay too much in taxes.

In recent decades, members of Congress have continued to relieve the wealthiest Americans of their responsibility to contribute to these collective duties through our tax system.  

Therefore, these policies have not only reduced the size of the middle class, they have also added to the tax burden of average Americans.

Rather than protecting the economic rights of all Americans, Congress has for decades created an economic system that favors the wealthy over workers.

As a nation we take pride in a government of the people, by the people and for the people. Most Americans understand that each of us have a duty to help meet the collective responsibilities of government.

Members of Congress must begin to act as if they understand that the wealthy are not exempt from that responsibility.