Which economic concept suggests that tax breaks for the wealthy lead to job creation for the lower classes?

The concept that tax breaks for the wealthy lead to job creation for the lower classes is primarily known as trickle-down economics. This theory posits that benefits provided to the wealthy, such as tax cuts or deregulation, will eventually flow down to the rest of the population through increased investment and spending. The idea is that when wealthy individuals and businesses have more capital, they will invest in new ventures, create jobs, and stimulate the economy, ultimately benefiting lower-income groups.

Supply-side economics is closely related and shares some principles, but it is more focused on the idea that reducing tax rates for businesses and high earners enhances economic growth. However, it does not specifically emphasize the gradual flow of benefits to lower classes in the same manner as trickle-down economics.

Keynesian economics, on the other hand, argues that active government intervention is necessary to manage economic cycles and stimulate demand during downturns. It does not advocate for tax breaks for the wealthy as a primary means of economic stimulation.

Demand-side economics focuses on increasing demand to drive economic growth, advocating for policies that support consumer spending rather than supply-side measures.