The trickle-down theory states that tax breaks and benefits for corporations and the wealthy will make their way down to everyone.
 | | Term of the Day | Words to Know | | |  | | Trickle-Down Theory | | 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. | | Read More » | | Related to "Trickle-Down Theory" | | | | Inflation vs. Stagflation: What's the Difference? | | Inflation is a term used by economists to define broad increases in prices. Stagflation is a term used by economists to define an economy that has inflation, a slow or stagnant economic growth rate, and a relatively high unemployment rate | | Read More » | | | Deregulation | | Deregulation is the reduction or elimination of government power over a particular industry, usually enacted to try to boost economic growth. | | Read More » | | | Stagflation | | Stagflation is the combination of slow economic growth and high unemployment with inflation. | | Read More » | | | Reaganomics | | Reaganomics is a popular term referring to the economic policies of Ronald Reagan, the 40th U.S. President (1981–1989). | | Read More » | | | Voodoo Economics | | Voodoo economics is a popular phrase first used by then-candidate George H. W. Bush to cast doubt on Ronald Reagan's economic policies. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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