Question

According to the 'trickle-down' policy of Republican president Ronald Reagan, what is the primary economic benefit of reduced taxation?

Answer 1

Trickle-down economics, or “trickle-down theory,” states that tax breaks and benefits for corporations and the wealthy will trickle down to everyone else. It argues for income and capital gains tax breaks or other financial benefits to large businesses, investors, and entrepreneurs to stimulate economic growth. The argument hinges on two assumptions: All members of society benefit from growth, and growth is most likely to come from those with the resources and skills to increase productive output.

Answer 2

According to this theory, reduced taxation would result in more money for the business-owners and upper tier of the country, The thought is that businesses would employ more people, those people would buy more things, and the cycle repeats.