Question

1. Political theories or positions -tell what Thomas Sowell political importance is

2.How are the trickle down theory are being use today - explain how they are important to us today -How might we use their theories in today's economy

Answer 1

1. There is no single reason that can explain the differences in income and wealth among individuals, races, nations or civilizations. There are countless factors and combinations of factors like geography, culture, social factors, and politics that vary so much from one nation to the next that it would actually be a miracle if somehow income and wealth was equally distributed throughout the world.

• Disparities in wealth have existed for thousands of years between countries along with disparities in the underlying things that create wealth (knowledge, skills, habits, discipline) because of differences in geographic, cultural, social and political settings.
• Differences in wealth and income are due to differences in production. The reason for these differences is often a combination of factors, not just any single isolated factor.
• When you consider how different geography, culture, politics, and demographics are from one country to the next, it would actually be shocking if every country experienced equal levels of prosperity and progress.

2. Trickle-down economics is a theory that claims benefits for the wealthy trickle down to everyone else. These benefits are tax cuts on businesses, high-income earners, capital gains, and dividends.

Trickle-down economics assumes investors, savers, and company owners are the real drivers of growth. It promises they’ll use any extra cash from tax cuts to expand businesses. Investors will buy more companies or stocks. Banks will increase lending. Owners will invest in their operations and hire workers. All of this expansion will trickle down to workers. They will spend their wages to drive demand and economic growth.

Republicans continue to use trickle-down economic theory to guide policy.

On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act. It cut the corporate tax rate from 35 percent to 21 percent beginning in 2018. The top individual tax rate drops to 37 percent. Trump's tax plan cuts income tax rates, doubles the standard deduction, and eliminates personal exemptions. The corporate cuts are permanent while the individual changes expire at the end of 2025.

The Tax Policy Center found that those earning in the top 1 percent would receive a larger tax cut percentage than those in lower income levels. By 2027, those in the lowest 20 percent income levels would pay higher taxes.

In 2010, the Tea Party movement rode into power during the midterm elections. They wanted to cut government spending and taxes. As a result, Congress extended the Bush tax cuts, even for those making $250,000 or more.