Except that for a lot of businesses, it's actually that any dollars an employer does not give to his employees, it keeps as profit. Then maybe it pays that out as dividends, but those mainly go to rich people who are likely to reinvest them rather than immediately spending them, because that small increase in dividend receipts doesn't make a huge difference on their overall financial situation.
Whereas extra dollars going to a minimum wage earner will almost entirely be spent, because people that poor tend to spend nearly all of their income.
It's the same reason why tax cuts to the poor are more stimulative than those to the rich.
The underlying assumption in your argument is that when someone who is not on minimum wage earns an income, whether through profit, dividend or earnings, gets reinvested rather than 'spent'.
OK, I'll go along with that - most people invest their excess earnings above a certain level.
But that's where your understanding breaks down. Those 'investments' are not money stuffed in a mattress. Mostly it is kept in financial instruments or directly in businesses or properties. Each one of those investments is making people better off, whether by employing minimum wage workers, building houses for people, or delivering services - whatever - but it's not stuck under a mattress. Even if it is put in a bank account as cash, the bank then takes that money and re-lends it out to seomeone else to finance a house, a business, a car - whatever.
I'll agree that tax cuts to the poor are an excellent stimulus - as long as they are replaced with commensurate reduction in public spending. It is far better to cut the tax rate for a low income earner and let that earner decide what to do with the extra cash, than to take it as taxes and have a beuracrat decide what to do with that persons cash.
Of course, cutting taxes for every income level is the best plan overall, as long as you cut government spending at the same time. And for most governments, that means cutting welfare spending. If you let low income earners keep more of their cash, then you spend less on welfare.
>...but those mainly go to rich people who are likely to reinvest them rather than immediately spending them, because that small increase in dividend receipts doesn't make a huge difference on their overall financial situation.
And when they reinvest that money what do you expect happens to it?
I would argue that dividends feed everyone's retirement and investment accounts, but:
* As you pointed out, those are class-biased towards the upper middle class and those richer.
* Worse: companies nowadays seem to be paying out pathetically low levels of actual dividends compared to their monumental earnings. It's an unsustainable economic model where earnings are supposed to create a higher stock price rather than a dividend payout, even for absurdly profitable companies like Apple.
Whereas extra dollars going to a minimum wage earner will almost entirely be spent, because people that poor tend to spend nearly all of their income.
It's the same reason why tax cuts to the poor are more stimulative than those to the rich.