Extension of High-Income Tax Cuts Would Benefit Few Small Businesses; Jobs Tax Credit Would Be Better

Policymakers who are rightly concerned that nearly one in ten Americans cannot find a job should allow the high-income tax cuts to expire on schedule and channel the resulting revenues in the first year to a robust job-creation tax credit.  The Congressional Budget Office estimates that a cut in employer payroll taxes for firms that hire more workers would create four to eight times as many jobs per dollar of cost as extending the high-end tax cuts.  Moreover, such a tax credit would be strictly temporary and thus would add only negligible amounts to long-term deficits.