Luke 21:1-4
21
He looked up and saw rich people putting their gifts into the treasury; 2he also saw a poor widow put in two small copper coins. 3He said, ‘Truly I tell you, this poor widow has put in more than all of them; 4for all of them have contributed out of their abundance, but she out of her poverty has put in all she had to live on.’ (NRSV)
Trickle-down economics - the philosophy championed by Ronald Reagan and George W. Bush - is based on two main social theories. First, if the wealthiest are freed of their tax burden they'll use that money to create more jobs by investing in profitable businesses. A second assumption is that once taxes are cut on the wealthiest Americans that the decline in revenue for the government isn't problematic because wealthy charitable givers will make up for any cuts in government services that support those living in poverty or for education programs, as examples.
What's wrong with these assessments? Plenty. When Ronald Reagan and his heir George H.W. Bush left office the nation had accumulated more debt in their three terms than under all the previous presidents combined, poverty levels grew, and the wealthy just got more wealthy. President Clinton reversed the trend and raised taxes on the wealthiest. The result: historic budget surpluses and a decrease in poverty levels (and the rich got even richer). Flash forward to 2001 and a return to trickle-down economics (often called Reaganomics) and by the time George W. Bush left office we had returned to historic deficit levels, poverty rates grew every year of his presidency, and eventually we witnessed the near total collapse of economy. It will takes years to undue the damage.
And did the wealthiest Americans give their money away? Nope. The Chronicle of Philanthropy noted in 2004 that "those who earn $200,000 to $10-million a year" gave away less of their money as a percentage of income than those making less than $200,000 or those making over $10 million (the super-rich like the Gates-Buffet group that just pledged to give away half of their income...which still won't come close to erasing the cuts in social service programs under the last Bush presidency).
A debate is now underway about whether or not to extend Bush's tax cuts for the wealthiest Americans. Even Ronald Reagan's budget director, the virtual father of trickle-down economics, says doing so would bankrupt the country.
Yet we still hear the old tired argument that lowering taxes on the richest Americans will mean increased giving. Not so says yet another study on the issue that comes to the same conclusion as many others: those that are poor give away more of their money. Even in their abundance the wealthiest among us don't give as much as those of us who are poor. NPR reports:
