Trickle Down Economics is an economic theory that functions by lowering taxes for the wealthy, so corporations or 1%’s have more money to push back into the economy. For example, let’s say some fat cat CEO, who qualifies for the cut, decides to build a new house. They have the money to buy a large piece of land and employ people to build the house. In an ideal situation they would push as much as there money back into the U.S Economy, but if this person has the money to spend, they might want order their marble countertops from Italy.
This kind of tax cut is also provided to large corporations. Supporting the supplier, to pay off some of their fixed costs, and in turn create jobs. By being able to supply jobs, They are creating more consumers and generating demand.
This theory is justified by the Laffer Curve. The graph is saying that there is an equilibrium for amount of taxes that 
government can collect without constraining economic growth. If they raises taxes above this amount, demand would drop severely and then while trying to correct the damage by narrowing the tax base the government begins to lose revenue, and loss revenue ultimately closes the government.
The main flaw with this Economic theory is that it is not attached to any real figures. If our economy existed within a state of ceteris paribus this theory would work. However, not every dollar made and spent is reported to the government, and not all of it that money stays inside domestic trade. There also lots of ways people can avoid paying taxes, and lots of people whose taxes are already too high.
Former President Ronald Reagan stuck by this thinking. In 1981, Reagan signed the Economic Recovery Tax Cut. This plan cut 25% of the tax rates across the board, Cutting the top rate from 70% to 50%, the bottom rate from 14% to 11%, also lowering estate taxes and the taxes for corporations. The implementation of this supply-side economic plan lasted from 1981 to 1989. It is often referred to as Reaganomics. While it did allow for economic growth, it doesn’t take inflation into account. During this period there was a 6% increase of government tax receipts, which was mainly due to the 12% rise of inflation.
As an Economics student this makes a lot of sense to me. Within an academic environment, this theory feels like a move that supports the prospects of Capitalism and free market. In practice however this theory has seen a mix of success and losses. After my research I’ve come to understand just how unpredictable and almost unscientific the economy is. There seems to be no economic idea that hasn’t been proven wrong at least once, due to the lack of consistency within to the economy.
Sources: https://www.thebalance.com/trickle-down-economics-theory-effect-does-it-work-3305572
https://www.thebalance.com/what-is-the-laffer-curve-explanation-3305566
21st Century Citizenship 