Do you know God’s view of prosperity is not Trickle Down but Waterfall Economics?
When it comes to economic issues, there are two competing views that affect one’s approach to prosperity. From both a governmental and a tax perspective. I’ll give a layman’s view of what is seen, regardless of the technical or biblical issue surrounding the subject of economics and taxes.
Trickle down or waterfall?
- Trickle Down Economics – Cut TAXES ONLY. The so called “trickle down” economics that President Reagan was able to accomplish. He used the Laffer Curve approach regarding economics. Reagan correctly understood that cutting taxes/tax rates would spur economic growth. But he only saw one side of the economic coin.
- Waterfall Economics – Cut TAXES AND GOVERNMENT SPENDING. President Coolidge/Secretary of Treasury Andrew Mellon (the fourth richest American) did this to create the Roaring Twenties. This one-two punch (Cut taxes, cut federal spending) accelerated even more the economic turnaround because it meant the government was living within it’s means, like most average Americans do.
Live within your waterfall means, home, state, and national taxes
It’s helpful to see what difference between trickle down and waterfall economies means by first starting out and seeing where taxes come from.
Some regard private enterprise as if it were a predatory tiger to be shot. Others look upon it as a cow that they can milk. Only a handful see it for what it really is –the strong horse that pulls the whole cart. Winston Churchill
The type and level of involvement of the government (from 0% which is anarchy to 100% being a totalitarian government) in an economy determines their level of prosperity.
One-two punch to economic growth
While Reagan’s tax cuts did spur economic growth, it was only partly successful. It was only one half of the coin of economic value. What the team of Coolidge/Mellon did was waterfall economics, they cut the top tax rate from 77% to 25% and then proceeded to cut the size, scope, and spending of the Federal government. It was the one-two punch that created a waterfall approach to getting the American economy going even faster. The results were that under Coolidge/Mellon Americans were able to put more money back into the people’s hands. But they were able to cut the national debt from $24B to $18B within a decade. As seen from the chart below (from this US Govt Spending web site) one can see that their economic and governmental spending policies were great for the country’s financial and economic health
But taxes are also a biblical issue, as Jesus points out what the Pharisees were doing to the Jewish people. Matt 23:4 says, “They tie up heavy burdens and lay them on men’s shoulders, but they themselves are unwilling to move them with so much as a finger.” When it comes to taxes, the Bible is most often quoted that the Jews were to bring “their tithes and offerings” to God’s treasury. But was does it for the Church when it comes to “tithing.” Here is a detailed look at the subject, ” ‘Will a Man Rob God?’ (Malachi 3:8): A Study of Tithing in the Old and New Testaments” and who we’re to look at this subject.
Taxes take away our individual responsibilities toward what God has blessed us with.
Who gets the eternal rewards for helping the poor if I do it versus the government does it?