Been watching the Sunday talking heads on CNN again this morning, and I don’t get it–why do Democrats allow the right to frame the debate over jobs and taxes with a rhetorical fallacy? Specifically, the big Republican talking point is to say that raising taxes on “small businesses” (code for individuals with the highest incomes) would kill jobs–but it seems to me that the opposite is true. Is this crazy?

When a business takes in revenue, it can either spend it on something like a new employee or disburse it to its owners. If spent, the money becomes a business expense and doesn’t get taxed. If the business holds onto it or disburses it, then it becomes income, and gets taxed at the prevailing individual or corporate rate. So wouldn’t raising that rate provide an incentive to hire more people? It would be even more of a job-creating incentive to enact permanent reductions of domestic payroll taxes such as FICA, Medicare, unemployment insurance, etc, and make up the difference from taxes on profits, dividends, and other disbursements.

Not to mention, if tax revenue is spent to improve infrastructure, build roads, do research, educate our kids, etc, that employs people as well. Seems a no-brainer.

Or am I missing something?

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