Does Trickle-Down Economics Work?

Source: https://www.thebalance.com/trickle-down-economics-theory-effect-does-it-work-3305572

Ronald Reagan was a highly conservative President and felt that individual freedom was vital, therefore taxes should remain low to support this freedom. He also believed in the trickle-down economic theory whereby if high income earners gain an increase in their salary, then everyone in the economy will benefit due to wealth being able to filter through all sections of society. 

On the whole, this article praises Reagan's ideals as during the Reagan administration the lowest income individuals were paying just 28% tax, whilst corporate tax was also lessened from 46% to 40%. Lowering taxes was important for Reagan and by lowering income tax people were starting to keep a lot more of their money then they ever had before. Also, the 1980s and the years that followed marked points where American businesses were starting to dominate the market. By keeping this tax low, businesses were staying in America and not leaving to go abroad, (e.g. China) therefore more jobs were being made and kept. The unemployment figures during the recession were extreme, however Reagonomics swiftly ended the recession and he left the presidency at a comfortable 5.4% unemployment rate. 

The source also shows how American economist, Arthur Laffer suggests tax cuts do provide a powerful multiplication effect where over time, lost government revenue is easily replaced because of the growth and prosperous economy which is sustained via a low tax base. Furthermore, the economic reforms meant the US remained a low-tax economy for years which inspired Republicans to keep up the fight of keeping this belief as it was helping Americans massively. Even the two presidents that followed Reagan, Bill Clinton and George H. W. Bush; they never really altered the tax system heavily and during their years the economy was even better with the US sustaining their place as a super power nation. Moreover, by fostering the world's greatest economy, Reagan essentially bankrupted the Soviet Union, which led to their demise and this was without firing a single shot directly at the Soviets. 

This article supports the tickle-down theory yet also suggests that income equality worsened  as the richest saw an 80% increase, the bottom fifth's income rose by 6%. Now whilst this may look like a serious flaw in the ideology on paper, just because the richest have succeeded more does not necessarily mean this harms the poorer. This is because they are still gaining more money than they ever were previously. It just so happens that Reagonomic's meant the poorer would get richer, yet the rich would get even richer. For ordinary people, i.e. the middle class, this ideal would've somewhat come to a median.  Prosperity trickled up for all classes of society in some way because of Reagan's tax system, as well as making American an economic titan. To do this during the Cold War where government spending needed to be high for military use, it becomes all the more impressive how Americans were still gaining in wealth.