Taxes are reduced, so people have increased income to spend.
It was based on the Laffer curve which states that as income taxes are raised total tax revenues for government spending go up...but only up to a point. The Laffer also shows that at some point of increased taxes the incentives to work and earn income (that will be taxed) goes down. And in fact total tax revenues will decrease leaving the government with less to spend on welfare and other government programs.
A similar effect is speculated for corporate taxes. The total tax revenues will increase as the taxes are increased, but only to a point. Past that point the corporations will lose the motivation to produce more goods and services (supplies) so they will back off production and the total revenue from corporate taxes will also drop.
Now here's where the trickle down (aka, supply-side) debacle comes into play...Reagan's myth. The Republicans continually harp that corporate taxes should be cut so that corporation will make more profits (net profits after taxes) and be inclined to produce more goods and service and add more jobs. Which is to say the profits of the corporations will trickle down to the workers.
But the data don't show that happening. Instead the data show that senior management and stockholders took a larger share of the increased profits as their own. And that's why 1% of the people in the US own 95% of its wealth. The rich got richer leaving the poor relatively poorer.
Reaganomics refers to the economics policies instituted by former President Ronald Reagan. ... Reaganomics was influenced by the trickle-down theory and supply-side economics. Under President Reagan's administration, marginal tax rates decreased, tax revenues increased, inflation decreased, and the unemployment rate fell.
The fiscal policies of Republican Ronald Reagan were largely based on supply-side economics. Reagan made supply-side economics a household phrase and promised an across-the-board reduction in income tax rates and an even larger reduction in capital gains tax rates.
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Not very well.
no- President Ronald Reagan did not have any nieces.
He was an actor, then governor of California, then the 40th president of the U.S.
His middle name was Wilson.
Ronald Reagan
Ronald Reagan believed in the principle of trickle down economics.
Ronald Ragen
Ronald Wilson Reagan
Ronald Reagan is 6ft 1in
Neil Reagan
Ensuring that the US Military was larger than the Soviet military
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Ronald Reagan