Trickle down doesn't work

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Harvard’s Larry Summers, in an article co-authored with Natasha Sarin of the University of Pennsylvania Law School, argued that “[t]urning the tax code into a vehicle for confronting what some call ‘oligarchic drift’ would undermine business confidence, reduce investment, degrade economic efficiency and punish success.” Summers, however, didn’t explain how even with massive capital accumulation by the top one-tenth of 1 percent, and without a wealth tax, America had somehow lapsed into the “secular stagnation” he has long contended ails the nation’s economy—an ailment chiefly characterized by a deficiency in capital investment.

Therein lies the rub: In fact, as wealth has concentrated to an unprecedented degree at the tip-top of the economy, investment has correspondingly declined. As one University of Chicago economist has documented, between 1984 and 2014 the share of income going to investment declined by 7.2 percent, the share going to labor declined by 6.7 percent, and the share going to shareholders rose by 13.5 percent. The rich are getting richer, that is, at the expense of investment..

How a Wealth Tax Would Increase—Not Decrease—Investment - The American Prospect