It’s time we embraced trickle-up economics | Opinion

Maine Resident William Smith Urges Shift From “Trickle‑Down” to “Trickle‑Up” Economics

Westbrook, Maine – A column by Westbrook resident William Smith published in the Press Herald on Tuesday challenges the long‑standing U.S. policy of cutting corporate and high‑income taxes in the name of “trickle‑down” economics. Smith argues that the strategy has not produced the promised benefits for working families and that the data – especially from Maine – show a different picture.

A 46‑Year Experiment

Smith points to a history that began in 1981, when President Ronald Reagan introduced a tax package that lowered rates for corporations and the wealthy while simultaneously financing the cuts through deficit spending. According to Smith, the move was unprecedented: before Reagan, deficits had been used to pay for war or to stabilize the economy, not to fund permanent tax cuts for the top earners.

The strategy was repeated during the George W. Bush administration with tax cuts in 2001 and 2003, and again by President Donald Trump in 2017, when the top federal corporate income tax rate was dropped from 35 percent to 21 percent. All three administrations financed the reductions without raising other revenue, according to Smith, and the cumulative effect of these unfunded cuts is estimated by economists to account for roughly 30 percent of the current national debt.

Consequences for Workers and Communities

Smith cites a number of macro‑level trends that he says illustrate the failure of trickle‑down economics:

• Stagnant wages – Despite rising productivity since the 1980s, workers’ share of that productivity has not kept pace.
• Weaker retirements and higher healthcare costs – As wealth accumulates at the top, public programs that support retirees and health care have faced increasing strain.
• Growing wealth inequality – More than 90 percent of all U.S. stocks are owned by just 10 percent of the population, a concentration that Smith says is a clear sign the economy has not “trickled down” to the majority.

Smith argues that because the wealthy tend to invest their additional income in financial markets rather than spend it in local economies, the tax cuts have not translated into broader economic growth. Instead, the money has been “concentrated” in assets owned by a small fraction of the population.

The Maine Experience

Maine is used by Smith as a microcosm of the national picture. Each year the state sends billions of dollars in federal taxes to Washington, D.C. Much of that money is earmarked for the same corporate tax cuts and high‑income preferences that Smith describes, and it does not “come back” to Maine families in a way that raises wages or strengthens local communities.

Smith notes a contrast that occurred during the COVID‑19 pandemic. When federal stimulus checks were sent to Maine households, poverty in the state fell. The money was spent on groceries, cars, childcare, home repairs and medical bills, creating a “high‑multiplier” effect that benefited small businesses and supported job creation. The article describes this as a concrete example of “trickle‑up” economics—money put into the hands of workers, who then spend it locally, generating additional economic activity.

A Call for Policy Change

The column proposes that the U.S. adopt a “performance‑based” tax system. Under such a system, companies would receive tax reductions only if they raise wages, improve benefits, or invest in long‑term worker stability. Smith argues that tying tax incentives to concrete outcomes would redirect the flow of capital into the parts of the economy that actually drive growth—workers, families and local communities.

“Real economic growth depends on the people who actually work and spend,” Smith writes. “When corporations receive blanket tax cuts, the wealth stays in the hands of a few. When families get the money, the economy expands in a measurable, sustainable way.”

Reactions and Context

The column does not include direct statements from policymakers or economists; it is a personal editorial. However, the data cited are drawn from a mix of federal tax statistics, research on wealth concentration and studies of fiscal multipliers that have been published by universities and think tanks. While Smith’s framing is persuasive, it remains a policy position rather than an empirical report.

The argument taps into a broader debate about the role of tax policy in addressing inequality. Some economists have argued that targeted tax cuts for businesses can spur investment, while others point to the limited effect of such cuts on wages and the widening gap between the top earners and the rest of the population.

Maine’s experience during the pandemic—where stimulus dollars directly reduced poverty—has been documented by the U.S. Census and other research agencies. The state’s poverty rate fell from 12.3 percent in 2019 to 10.8 percent in 2020, according in part to the distribution of federal assistance.

Bottom Line

William Smith’s column brings attention to a long‑running policy trend that has shaped the U.S. economy for more than four decades. By presenting the historical timeline of tax cuts, the measured outcomes for workers and communities, and an example from Maine’s own pandemic response, the piece argues that the “trickle‑down” model has largely failed to