Timos's Journal: Trickle Down (and out of the country)

Subheading: how globalization killed low taxes.

One of the strongest arguments for having low taxes has been that it helps business thrive and when people get rich they will spend money and eventually some of this money will trickle down and generate jobs and salaries for the middle and lower classes. This may have been true in the past but today in the global economy this is less and less true.

What happens now is that rich people and large corporations will hire illegal immigrants (who send their surplus out of the country) to do their house work, they outsource unskilled work to other countries which means that both money and jobs are leaving the country.

The bottom line is that both tax revenue and jobs are trickling down and out of the country. This leaves the middle and lower classes poor and leads to an increase in unemployment.

People will say that increasing taxes will lead to even more jobs leaving the country - but not if there is a corresponding increase in import tax. I am sure that some smart economics professor can figure out how to balance the two taxes so that less jobs will leave the country.

I hope that we can do something about this to stop the spiral effect caused by globalization.