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A new study (abstract and free PDF available) authored by several economists at the IMF (International Monetary Fund) reveal an inverse relation between increases in inequality and GDP growth. In what could also be considered a heavy blow to trickle-down economic theory, data analyses show (page 7) that increases of income share on the fifth quintile actually hurt growth, while increases in any other quintile favours growth with the lowest quintile showing the strongest push.
From the abstract:
We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class.
Original Submission
(Score: 1, Insightful) by Anonymous Coward on Friday June 19 2015, @05:44PM
I get taxed when I make money and when I spend that same money. Why should I find it immoral if a parent got taxed when they gained control of a pile of money and then their children get taxed with the pile passes to their control? Especially since both parties will expect the government to protect the smooth transfer of said pile of money?
(Score: 1) by khallow on Monday June 22 2015, @03:31PM
Why should I find it immoral if a parent got taxed when they gained control of a pile of money and then their children get taxed with the pile passes to their control?
The grandparent post explained why. Because that wealth is already being taxed. Multiple levels of taxation on the same lawful activity are reasonably considered wrong. The "smooth transfer of said pile of money" is already paid for. And with estate taxes, we actually interfere with that transfer of wealth and make it less smooth.