According to economist John Humphreys, the term “trickle down economy” is nothing more than a label used by opponents of capitalism to denigrate free markets.
Humphreys, the chief economist of the Australian Taxpayers Alliance, said that although the term is widely used, it was not found in economic studies.
“People who advocate free-market capitalism don’t actually use that term,” he told The Epoch Times in an email. “The left uses loaded language to ‘poison the well’ against its opponents, and thus avoid honest political debates.”
He said historical evidence shows that free market capitalism is the only sustainable way to lift millions of people out of poverty, and that reducing barriers and regulations is the only way to boost productivity and growth. wages.
“If it’s forced to debate evidence or theory, then the left struggles — then it relies instead on dishonest strawman arguments and cheap emotional manipulation.”
The economist also points out another deliberate distortion of capitalism and that it was a zero-sum game between the classes of society.
“The standard assumption among the left (including many media outlets) is that some people can only benefit if others lose. That’s why they often frame political debates through the lens of redistributing money. .
In fact, in the Epoch Times editorial series, The Specter of Communism, Marxist theory portrays society as a constant struggle between supposed classes, whether between men and women, teachers and students, different ethnic groups, and in the economic sphere – bosses and workers.
“Marx’s theory of exploitation divides people into two opposing classes: the bourgeoisie with capital and the proletariat without. But, in fact, class mobility has increased rapidly since industrialized societies emerged,” the series states.
“The degree of class mobility in the first half of the 19th century was similar to that of the 1970s in Britain and the United States.”
Attempts to reform the economy have met with resistance
Meanwhile, recent attempts by the British Truss government to cut taxes have drawn a flurry of criticism from the media and political commentators.
Additionally, there have been ongoing attempts to pressure the current Australian Labor government to abandon already legislated tax cuts due to take place in 2024-25, with the Australian Council of Social Services calling them ” inadmissible”.
Cassandra Goldie, CEO of the Council, said tax cuts for upper middle income people would not benefit those living in poverty.
Yet Stage Three tax cuts legislated under the previous Liberal-National government simplify the tax rate for those earning between $45,000 and $200,000, a segment comprised mostly of middle-income families.
Humphreys has previously backed tax cuts, saying such reforms can help spur economic growth. He also added that the reality of capitalist societies is that “everyone involved” in day-to-day business transactions benefits.
“That’s why they voluntarily accept trade in the first place. By lowering barriers to trade (lower taxes and less regulation), there are more opportunities for more people to find more ways to cooperate with each other. with others, creating more win-win exchanges, which is the engine of economic growth.