The tax cuts granted to the richest over the past 50 years in the most developed countries have not helped to create jobs or growth, according to a study by two British researchers and published on Wednesday. It thus highlights the limits of the controversial “streaming theory”.
Analyzing tax levies in 18 OECD countries over the past half-century, the two economists, David Hope, of the London School of Economics, and Julian Limberg, of King’s College London, noted that the declines in taxes granted to the rich only benefited them and thus increased inequalities .
This conclusion goes against the “trickle-down theory”, according to which the enrichment of the wealthiest benefits the poorest, because this money would then be reinjected into the economy, via consumption or investment. An idea at the heart of Emmanuel Macron’s policy since his election – even if he denies it -, highlighted by his decision to abolish the ISF (solidarity tax on wealth) in 2018. In the United States United, Donald Trump’s major tax reform in 2017 was also based on this theory.
DO NOT “FEAR” TO INVOLVE THE RICHEST
“Our research suggests that such policies (of tax cuts for the richest, editor’s note) do not produce the runoff that their supporters claim,” David Hope told Bloomberg . Thus, in the midst of the economic crisis caused by the coronavirus pandemic, “political decision-makers should not fear that an increase in taxes for the wealthy, to finance the financial costs of the pandemic, will harm their economies,” he underlines.
What to give grain to grind in France to the supporters of a re-establishment of the ISF to finance the emergency economic measures intended to help the professions most affected by the health crisis. A measure demanded in particular by the left-wing opposition and by the Nobel Prize for economics Esther Duflo, but swept away by the government.