Inference
Tax Cuts for the Bottom 90% by Clark Merrefield
Employment increases after taxes are cut for most income earners but not when tax cuts target the top 10% of earners according to a recent paper in the Journal of Political Economy looking at data from the 1980s through the 2000s. For decades, the political argument in favor of tax cuts for big businesses and wealthy individuals has boiled down to an assumption that they would invest their tax savings into jobs that would swell the wallets of ordinary Americans. The so-called "trickle-down" economics intuitively evokes an image of water moving from high to low ground, unable to fight the irresistible force of gravity, saturating one and all. Recent research from Princeton University economist Owen Zidar adds to past academic analyses and real-world experiments challenging the idea that tax cuts work anything like waterfalls.
Select the detail that supports the inference that tax cuts for the wealthy do not reach the ordinary American.
12
A political argument in favor of tax cuts for big businesses and wealthy
R tax savings into jobs that would swell the wallets of ordinary Americans
O an image of water moving from high to low ground
℗ real-world experiments challenging the idea that tax cuts work anything like waterfalls
Short Answer: What inference can be made about past research on tax cuts?
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Select the detail that supports the inference that tax cuts for the wealthy do not reach the ordinary American.
*
5 points
A political argument in favor of tax cuts for big businesses and wealthy
B tax savings into jobs that would swell the wallets of ordinary Americans
C an image of water moving from high to low ground
D real-world experiments challenging the idea that tax cuts work anything like waterfalls
What inference can be made about past research on tax cuts?
*
10 points
The past research on tax cuts suggests that the assumption that tax cuts for the wealthy would benefit ordinary Americans by creating more jobs and boosting their wallets is not supported by real-world experiments and academic analyses.
Select the detail that supports the inference that tax cuts for the wealthy do not reach the ordinary American.
*
5 points
A political argument in favor of tax cuts for big businesses and wealthy
B tax savings into jobs that would swell the wallets of ordinary Americans
C an image of water moving from high to low ground
D real-world experiments challenging the idea that tax cuts work anything like waterfalls