Former U.S. Labor Secretary Robert Reich called trickle-down economics "a hoax," saying wealth and power have accumulated with the richest 1%.
In a post on X on Sunday, Reich said Republicans in Washington have told Americans for decades that tax cuts "would trickle down to workers."
"Instead, wealth and power have accumulated in the hands of the richest 1% at the expense of the rest of us," he wrote.
"Trickle-down economics was never supposed to work," Reich said. "It was a hoax."
Wealth Tax Push
In a September Substack post, Reich argued for a wealth tax, saying taxing wealth itself could reach billionaires even in years when they report little or no taxable income. He pointed to Paris School of Economics professor Gabriel Zucman’s work on wealth taxes and California’s proposed billionaire tax.
Reich also said Jeff Bezos was "partly right" that doubling his taxes would not help a teacher in Queens, since Bezos paid no income tax in some years.
In an August open letter to Treasury Secretary Scott Bessent, Reich cited Federal Reserve figures showing the richest 1% held 29.2% of national wealth in the first quarter this year. He also cited comments from McDonald’s Corp. (NYSE:MCD) about a double-digit drop in visits from lower- and middle-income customers as evidence of a "two-tier economy."
Bessent Disputes Divide
The two have feuded publicly over whether the economy remains "K-shaped." Bessent has argued the so-called K-shaped economy is "over," citing Bureau of Labor Statistics data showing weekly earnings for workers at the 25th percentile rose 5.5% year-over-year, compared with 1.5% for those at the 75th percentile.
Bessent also accused Reich of "packaging falsehoods as fact" after the open letter.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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