For too long, trickle-down world leaders have been cutting taxes for the super-rich and corporations with the promise that their wealth will someday benefit the rest of us – but all this has done is pad the pockets of the wealthiest in our societies and push the wealth inequality gap wider and wider.

Unfortunately, around the world, global leaders just won’t let trickle down die – but luckily, they’re facing more pushback than ever. Today, we’re giving you all the details on one prime example of trickle-down clownery: Former Prime Minister Liz Truss’ failed budget proposal in the U.K.

In the 1980s, while Ronald Reagan was pushing tax cuts for the rich in the U.S., Margaret Thatcher was doing the same in the U.K. Now, as the U.K. faces the same economic challenges as much of the rest of the world does today, the Conservative Party only had the same old plays they’ve had for decades. Liz Truss became Prime Minister in September – and the day after she took office, she introduced a budget proposal that doubled down on trickle-down theories like we’ve never seen before. The plan would have cut taxes for the richest people, removed a cap on bankers’ bonuses, and canceled a tax hike on the rich – with no plans to pay for this lack of tax revenue.

To be frank, Truss’ trickle-down budget plan was like a comical Trickle-Down for Dummies roadmap. The U.K. already has one of the lowest corporate tax rates in the G7, one of the lightest touch regulatory regimes, and seven times more millionaire bankers than any other country in Europe. Helping the rich get even richer was never the answer to address the global inflation crisis – the same one we’re feeling on a smaller scale over here in the U.S.

If you saw any headlines coming out of the U.K. a few weeks ago, you’ll know Truss’ plan didn’t even make it to fruition before it blew up in flames. Economists and financial analysts were immediately alarmed by the proposal to make drastic tax cuts – and once these experts said that her plan would only worsen inflation, the market responded quickly. International investors began pulling money from the U.K., the value of the pound tanked to record lows, and the Bank of England had to jump in to save the economy from collapse.

It’s clear that no one supported Truss’ tired trickle-down plans – and after her proposal caused an economic meltdown, even members of her own party began publicly discussing replacing her. On Oct. 20, six weeks after she had assumed office, she resigned, cementing the shortest prime ministership in history and making “who was the PM when the queen died” the best trivia question 20 years from now.

It’s no wonder that economists and politicians around the world ridiculed Liz Truss’ trickle-down proposal. There are piles of evidence that show trickle-down theories don’t actually stimulate economic growth – they stall it. Take, for example, Donald Trump’s tax policies: After Trump drastically cut taxes for the wealthy and corporations in 2017, wages never went up, the law didn’t cause economic growth, and these cuts didn’t increase investment in American businesses.

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And, trickle-down policies haven’t just failed in the U.S. Research from the London School of Economics shows that over the past 50 years, the impact of tax cuts on growth across 18 developed countries is “statistically indistinguishable from zero.” In other words, not one cent “trickled down” from the super-rich elites to the rest of us.

This story coming out of the U.K. should be a lesson to us all: Let’s leave the era of trickle-down economics behind us and chart a new path forward. The only way to strengthen our economy is by making investments in the middle class – which will in turn give consumers more money to spend, stimulate the economy, and create more jobs. Because the truth is, growth comes from the middle out and the bottom up, not the top down, and a thriving middle class is the cause of economic prosperity, not a consequence.

Thanks for reading,

Team Civic Action

P.S. If you want to learn more about trickle-down economics in the U.K., listen to this episode of our podcast, Pitchfork Economics!

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