and "the trickle-down theory"
are terms in United States politics to refer to the idea that tax breaks
or other economic benefits provided by government to businesses and the wealthy will benefit poorer members of society by improving the economy as a whole.
The term has been attributed to humorist Will Rogers
, who said during the Great Depression
that "money was all appropriated for the top in hopes that it would trickle down to the needy."
The term is considered pejorative by some proponents of tax cuts
Proponents of these policies claim that if the top income earners are taxed less that they will invest more into the business infrastructure and equity markets
, it will in turn lead to more goods at lower prices, and create more jobs for middle and lower class individuals.
Proponents argue that economic growth flows down from the top to the bottom, indirectly benefiting those who do not directly benefit from the policy changes. However, others have argued that "trickle-down" policies generally do not work,
and that the trickle-down effect may be very slim, if indeed it even exists at all.