Ramit Sethi rips ‘lie’ that tax cuts for the rich are good for jobs, says conservatives trick you to serve the wealthy

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The notion that cutting taxes for the wealthy sparks economic growth that eventually benefits everyone lies at the heart of trickle-down economics. But according to personal finance guru Ramit Sethi, that idea simply doesn’t hold up.

“I'm rich & this is a lie. When politicians lower my taxes, I don't create additional jobs (only demand does that). I simply save that money,” Sethi wrote in a recent post on X (1).

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His comments came in response to economist Peter Schiff, who argued that lowering taxes on the rich ultimately helps low-income households.

“If you want to help the poor, then lower taxes on the rich. What helps the poor is a productive economy that makes goods and services more abundant and less expensive, while creating employment opportunities,” Schiff said. “The capital investment that makes that possible comes from the rich.”

Schiff’s view reflects a traditional supply-side argument: Economic growth starts at the top and reducing the tax burden on the wealthy frees up capital for business expansion, hiring and productivity-boosting investment.

Sethi — a best-selling author and popular podcast host — countered that while he’s rich, cutting his taxes doesn’t prompt him to hire anyone. He simply saves the money. And he didn’t mince words about those who continue to promote trickle-down theory.

“Trickle-down economics has been repeatedly debunked, yet conservatives lie to you so they can give their wealthy overlords more tax cuts,” he wrote.

Sethi’s critique reflects a demand-side view of the economy — the idea that businesses hire more workers when they see rising customer demand, not when wealthy individuals receive tax relief. In this framework, jobs are created when companies need extra hands to meet growing sales, meaning the key driver of economic expansion is consumer spending power, not the savings accumulated by high-income earners.

Most modern research finds little evidence that tax cuts for the wealthy generate broad job growth or rising wages (2).

For instance, a study covering 18 OECD countries found that major tax cuts for the rich did not lead to significant gains in growth or employment — though they did lead to higher income inequality (3). That’s why critics say the theory has been “debunked.” But some economists argue the benefits still exist — they’re just smaller, slower and more diffuse than early advocates promised (4).

‘I will teach you to be rich’

Sethi’s argument, while blunt, appears to have struck a nerve. His post has racked up 3.9 million views and 51,000 likes.

That may be because today’s economy is increasingly split. Experts have dubbed it “K-shaped,” a reference to the sharply divergent fortunes of the wealthy and everyone else. Simply put: The rich get richer as asset prices rise, while lower-income households face stagnant wages and rising living costs.

The good news? Sethi is the host of the “I Will Teach You To Be Rich” podcast and author of the best-selling book by the same name. He consistently stresses the power of long-term investing and the importance of using assets — not income alone — to build wealth.

“Investing is not just for rich people, investing is how you get rich,” he said (5).

Here’s a look at two types of assets the wealthy rely on — and how everyday investors can get in on the action.

Read more: Warren Buffett used 8 solid, repeatable money rules to turn $9,800 into a $150B fortune. Start using them today to get rich (and stay rich)

Stocks

The U.S. stock market has created enormous wealth for investors over the decades — and it’s now more accessible than ever.

Sethi has frequently highlighted the advantages of investing in stocks: high liquidity, low barriers to entry and strong long-term return potential. “The S&P 500 has historically delivered around 10% annual returns, making stocks one of the best ways to grow wealth. This performance stands strong even when accounting for market downturns and recessions,” he wrote (6).

And he’s right. Despite countless pullbacks, corrections and recessions, the S&P 500’s long-term trend has been unmistakably upward, though it is worth noting that actual annual returns can fluctuate quite a bit in any given year.

The index’s strength is a big reason why legendary investor Warren Buffett encourages everyday Americans not to overthink it. Instead of trying to pick individual stocks, he suggests most people are better off owning the market itself.

“In my view, for most people, the best thing to do is own the S&P 500 index fund,” Buffett has famously stated (7).

This approach gives investors exposure to 500 of America’s largest companies across a wide range of industries, providing instant diversification without the need for constant monitoring or active trading.

The beauty of this approach is its accessibility — anyone, regardless of wealth, can take advantage of it. Even small amounts can grow over time with tools like Acorns, a popular app that automatically invests your spare change.

Signing up for Acorns takes just minutes: Just link your cards, and Acorns will round up each purchase to the nearest dollar, investing the difference — your spare change — into a diversified portfolio. That morning coffee for $4.25? It’s now a 75-cent investment in your future.

With Acorns, you can invest in an S&P 500 ETF with as little as $5 — and, if you sign up today with a recurring monthly contribution, Acorns will add a $20 bonus to help you begin your investment journey.

Real estate

Real estate has long been a cornerstone of wealth-building in America and the sharp rise in home prices in recent years has only underscored its power.

Over the past five years, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index has surged 45% (8).

But the appeal goes far beyond price appreciation. Sethi often highlights real estate’s ability to generate passive income — a feature that can be especially valuable for retirement-focused investors.

“Rental properties can provide consistent cash flow, creating an income stream during retirement or financial independence. Well-maintained properties in good locations can generate income for decades,” he wrote (6).

Real estate is also a time-tested hedge against inflation.

“As inflation rises, property values and rental income typically increase, helping preserve and grow wealth over time. Physical assets like real estate often perform well during periods of currency devaluation,” Sethi noted. “This inflation protection makes real estate particularly valuable during periods of economic uncertainty.”

Still, Sethi acknowledges the challenges such as high transaction costs and ongoing maintenance and repairs that come with owning property.

The good news? You don’t need to buy a property outright — or deal with landlord headaches — to invest in real estate. Crowdfunding platforms like Arrived offer an easier way to get exposure to this income-generating asset class.

Backed by world class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes with as little as $100, all without the hassle of mowing lawns, fixing leaky faucets or handling difficult tenants.

The process is simple: Browse a curated selection of homes that have been vetted for their appreciation and income potential. Once you find a property you like, select the number of shares you’d like to purchase and then sit back as you start receiving any positive rental income distributions from your investment.

Another option is First National Realty Partners (FNRP), which allows accredited investors to diversify their portfolio through grocery-anchored commercial properties without taking on the responsibilities of being a landlord.

With a minimum investment of $50,000, investors can own a share of properties leased by national brands like Whole Foods, Kroger and Walmart, which provide essential goods to their communities. Thanks to triple net leases, accredited investors are able to invest in these properties without worrying about tenant costs cutting into their potential returns.

Simply answer a few questions — including how much you would like to invest — to start browsing their full list of available properties.

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

@ramit (1); The London School of Economics and Political Science (2); Socio-Economic Review (3); Cato Institute (4); @ramitsethi (5); I Will Teach You To Be Rich (6); CNBC (7); S&P Global (8)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.