Obama’s call for the rich to pay more to ease the burden on the middle and lower classes is the opposite of the philosophy established by Ronald Reagan. Robert Reich says Reagan’s approach didn’t exactly work out as planned and now replaced by Obamanomics.
Reaganomics:Lower taxes on the wealthy will made them work harder and invest more, and the benefits trickle down to everyone else.
Rarely in economic history has a theory been more tested in the real world and proven so wrong. Nothing trickled down. After the Reagan tax cuts, the median wage slowed, adjusted for inflation. After George W. Bush’s tax cuts for the wealthy, the median wage actually dropped.
Meanwhile, most of the income went to the top. In 1980, just before the Reagan revolution, the richest 1 percent took home 9 percent of total national income. But by 2007, the richest 1 percent was taking home 22 percent.
Obamanomics: Increase taxes on the top, and it will use these proceeds to raise the living standards of average Americans by giving them lower taxes, better schools, and more affordable health insurance.