Trickle down? A little bit

Research output: Contribution to journalArticle

Abstract

The new tax plan approved by the U.S. Senate, the Tax Cuts and Jobs Act, claims to offer the largest benefits to individuals in the middle of the income distribution. In this article, I examine the impact exogenous tax changes have on income shares of individuals in the bottom 50 percent of the income distribution. The findings suggest that lower taxes, that are exogenous to fluctuations in business conditions, have minimal direct benefits for individuals in the bottom 50% of the income distribution. Claims that trickle-down economics lift all income shares through lower taxes are not supported by the empirical findings.

Original languageEnglish
Pages (from-to)725-732
Number of pages8
JournalEconomics Bulletin
Volume38
Issue number2
Publication statusPublished - 1 Jan 2018

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