Trickle Down Theory

Optimistic view that benefits of fast economic growth (spurred by income tax reductions and unrestrained business activity) will seep through the high-income groups to all lower-income sections of a society, and that problems of unemployment and disparities in income-distribution will be automatically solved. Its opponents point out that those who benefit the most from an expanding economy spend considerable effort in cementing the bottom of their income pools to retain maximum advantage. See also supply side economics.

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