Agreed.
Nope. Merely giving tax cuts to high earners does not invest in capital or lower barriers on the production of goods and services. The argument that increased growth will make up revenue is the classic Laffer curve, but supply-side economic policy encompasses all encumbrances to the supply of goods and services. You’re just describing an income tax cut for the wealthy. That’s not supply-side econ.
There’s nothing inherently wrong with a tax cut for the wealthy, If you want to help the wealthy. It’s when politicians try to build support for it by promising it will help everyone else that I consider it to be trickle-down. That’s the part where I think it falls short, and expect it to again.
Has there even been a situation where giving tax cuts to rich people or comapnies didn’t result in them/their shareholders simply saying “Thanks!” and pocketing it?
I’m sure that if taxes are cut they’ll spend some of their money. And I’m sure that if taxes aren’t cut that they’ll still have money to invest if they see an opportunity to do so.
Like frame it and put it on the wall for good? No, that doesn’t generally happen. Money almost always circulates in some form. The trick is to make it circulate in the best way possible for a given set of goals. That is a lot harder to figure out.
By “pocket it”, I mean keep it for themselves. Sure, they might buy another sportscar or take their yacht to Aruba again, but I don’t think most of the very wealthy will think “Goody, I’ve saved $50k on my taxes now! I think I’ll hire another person to work in my Widget Business.”
It does depend.
In some situations, you are looking to hire another person to work in your widget business, but are somewhat limited in your budget, then a tax cut may allow you to hire another employee sooner than you would have otherwise. This is the situation I am in now, where every dollar that doesn’t go towards operating costs goes towards hiring and training new employees, a cut to my taxes could help that, but also, as I am reinvesting nearly all my profits as is, and paying myself very little, a tax cut actually would do me little good, it would barely be a subsidy to a new employee, much less pay for it.
In most situations, however, companies are stagnant at best, and laying off most of the time, due to decreased demand for labor, due to changes in the market, automation, and offshoring, and so a tax decrease will not incentivize those companies to hire employees that they don’t need, it will just allow the owners to get a larger profit margin.
If you want to create jobs with tax incentives, the tax incentives need to actually be tied to job creation, not just shovelling money at the wealthy and hoping that they hire people.