Robert Reich, the former U.S. Labor Secretary, has criticized the economic theory known as trickle-down economics, characterizing it as a "hoax" that has concentrated wealth among the top 1% of Americans.
In a post on X on Sunday, Reich argued that Republicans in Washington have promoted tax cuts for decades under the premise that benefits would "trickle down to workers." He stated that instead, wealth and power have accumulated in the hands of the richest 1% at the expense of the broader population.
Reich previously argued for a wealth tax in a September Substack post. He cited the work of Paris School of Economics professor Gabriel Zucman and California’s proposed billionaire tax as examples of how taxing wealth could target billionaires even when they report little or no taxable income.
In an August open letter to Treasury Secretary Scott Bessent, Reich referenced Federal Reserve figures indicating that the richest 1% held 29.2% of national wealth in the first quarter of the year. He also cited comments from McDonald’s Corp. (NYSE: MCD) regarding a double-digit drop in visits from lower- and middle-income customers as evidence of a "two-tier economy." Bessent has disputed Reich’s characterization of the economy, arguing that the so-called K-shaped economy is "over" based on Bureau of Labor Statistics data showing earnings growth disparities.
