Yep. Totally possible to make a joke without punching down. I distinctly remember in the 90s there was a comedy show on the local religious channel. The comedians themselves weren’t necessarily Christian but the goal of the show was “clean comedy for the whole family”. Some of it was bland but there was some funny stuff as well.

It’s definitely possible to be hilarious without also being an asshole to entire groups of people. Mitch Hedberg definitely comes to mind there.