Today, we are pleased to present a guest contribution by Christopher Otrok, Sam B. Cook Professor of Economics, University of Missouri, and Research Fellow, Federal Reserve Bank of St Louis. The views expressed here are our own and do not reflect the official opinions of the Federal Reserve Bank of St. Louis or the Federal Reserve System.
Conventional wisdom in some circles is that lowering tax rates on high-income people will result in economic booms that benefit those less well off—trickle-down economics. A half century of tax cuts for those with high incomes accompanied by increasing income and wealth inequality are suggestive that this conventional wisdom is not likely to be true. In recent work my coauthors and I develop a new measure of income tax progressivity. A key feature ofRead More »