Economics Interview Question:

What is trickle down economics?

Submitted by: Administrator

A derogatory term applied to Reaganomics, or supply-side economics, trickle-down economics is the theory that tax cuts for the wealthy merely "trickled down" to the bottom groups and that the rich benefited at the expense of the economy. Similar criticisms were raised about the supply-side tax cuts enacted by Treasury Secretary Andrew Mellon in 1921 but not for those made by John Kennedy in the 1960s. Supply-side cuts involve cutting taxes across the board but most dramatically for those in the top tax brackets. The rationale was that those who paid the most taxes would then be able to reinvest their tax "savings." Thus, supporters have countered the phrase "trickle-down" with the one coined by John Kennedy: "a rising tide lifts all boats."
Submitted by: Administrator

Trickle Down Theory says that whenever an economy faces economic growth, at first it benefits the rich and higher levels of society and slowly steadily as time passes the benefits trickle to the lower levels of economy as well.
Submitted by: Priyanshi Mittal