Biden's "Sick of Trickle-Down" Tweet Sparks Buzz... Targeting UK Prime Minister Truss?

[Asia Economy Reporter Park Byung-hee] U.S. President Joe Biden's tweet on the 20th (local time) regarding trickle-down economics has attracted attention. Trickle-down economics is a theory that increasing the wealth of large corporations and the wealthy will stimulate the economy, benefiting small businesses and low-income groups.

According to major foreign media, President Biden tweeted, "I am sick and tired of the trickle-down theory," adding, "There is no trickle-down effect, and our government will build the economy from the bottom up."

Foreign media noted that President Biden's mention of trickle-down economics came ahead of the new UK Prime Minister Liz Truss's economic policy announcement on the 23rd, which is centered on tax cuts. Prime Minister Truss has argued that reducing taxes for the wealthy and corporations can increase growth rates. Unlike President Biden, Truss has taken a stance defending trickle-down economics. Biden also stated in his first joint session speech to Congress last April that there is no trickle-down effect and that the economy should be grown from the low-income and middle-class sectors.

UK government officials dismissed claims that Biden's tweet was aimed at Truss as absurd, arguing that the economic situations in the UK and the US are different. Foreign media reported that when asked whether Prime Minister Truss expects trickle-down effects and is pushing economic policies accordingly, Truss's spokesperson replied that there had been no discussions related to economic policy.

Liz Truss, Prime Minister of the United Kingdom
Photo by Reuters Yonhap News

Truss, visiting New York to attend the United Nations General Assembly, said in an interview with Sky News, "I cannot accept the claim that tax cuts are unfair," adding, "Reducing taxes for the wealthy and profitable companies is not unfair." She said, "We know that those who earn more pay more taxes," and added, "The reason tax cuts can unfairly benefit the wealthy is because they pay more taxes." Truss also acknowledged that her popularity might decline due to the tax cuts. She stated that the government will actively intervene to lower energy prices in a way that benefits everyone.

Foreign media explained that Truss is preparing an economic policy focused on growth and that her government believes tax cuts will be an important factor in growth. They added that this means the economic policy stance of the previous Conservative government, which focused on distribution effects, will change under Truss's new Conservative government.

Accordingly, the plan to raise the corporate tax rate from the current 19% to 25% next year, promoted by Chancellor Rishi Sunak in the previous Boris Johnson government, is expected to be scrapped.

New Chancellor Kwasi Kwarteng is expected to announce on the 23rd the cancellation of the corporate tax increase plan and a stamp duty reduction to stimulate real estate transactions. Restrictions on bankers' bonuses are also expected to be lifted. Plans for new investment zones that will receive tax cut benefits are also expected to be announced. The government is reportedly requesting investment proposals from about 40 local councils recently.

This content was produced with the assistance of AI translation services.