It does not get spent on American businesses. I wish it did, but a large share (~40%) goes to entitlement programs (Medicare, SS). Then you've also got defense spending, which benefits some companies, and also you've got other things like debt interest, homeland security, etc.
That's not accurate either. Those entitlement checks get sent out regardless of whether we raise or lower taxes, and come from FICA taxes. They have nothing to do with higher income taxes. They're a sunk cost. Raising income tax (and spending the newly raised money) would just lower the % spent on entitlements, since it wouldn't raise the dollar amount 1 cent.
If there is any FICA surplus, it's saved to help pay for the huge amount of retirees we'll have in 10 years.
Not to belabor the point unnecessarily, but Social Security checks are generally injected immediately back into the economy as well, and Medicare-while it does help prop up the least fiscally efficient medical system in the world--does, at least, get spent in the US. Defense and Homeland Security spending benefit some companies at the expense of others; that's an effect with debatable benefit. The debt interest supports the GP's other point, that the money would be taxed or inflated away eventually, anyway.
It does not get spent on American businesses. I wish it did, but a large share (~40%) goes to entitlement programs (Medicare, SS). Then you've also got defense spending, which benefits some companies, and also you've got other things like debt interest, homeland security, etc.
http://www.wallstats.com/deathandtaxes/ is a pretty good visualization.