It’s too easy to label President Obama’s State of the Union as more tax-the-rich and redistribution. We know that. Rather than name-calling, Republicans must draw a clear line in the sand between their worldview and Mr. Obama’s. I’d call that line commonsense economics.

First, you can’t create a new business or sustain an existing one without the seed corn and nourishment of capital investment. Second, only businesses create jobs. You can’t have a job without a business. Third, jobs create all incomes, including middle-class incomes. Fourth, incomes create family and consumer spending.

Okay? This is not complicated. It’s common economic sense. University of Chicago economist Casey Mulligan states this in a simpler way: Growth starts with investment and ends with consumer spending. Regrettably, Mr. Obama doesn’t get this. That’s why he’s proposing the third capital-gains tax hike of his tenure.

The president started at 15%, went to 20%, with Obamacare took it to 23.8%, and now wants 28%. This damages business, jobs, and middle-class incomes. Ironically, history shows that lower capital-gains tax rates produce higher revenues. Think Bill Clinton and George W. Bush. But a higher capital-gains tax produces lower revenues. Think late-Reagan, Papa Bush, and now Mr. Obama.

Mr. Obama also proposes to raise the tax burden on capital by increasing inheritance and estate taxes. He’s making another attempt to tax banks — only this time he is adding in asset managers and insurance companies. Ironically, a huge part of Mr. Obama’s base — police officers, firefighters, teachers — might suffer a serious depreciation of pension-fund stockholdings.

So, taxing capital will hurt the very middle-class workers and incomes Mr. Obama claims he wants to help. His so-called middle-class economics doesn’t work. A related point: Obama’s SOTU made no mention of cutting corporate tax rates. Instead the president trashed the top 1% and slammed companies for keeping profits abroad and using unfair loopholes and deductions.

He’s right about loopholes and deductions. Let’s close them. But while we’re at it, let’s slash the corporate tax rate and make America more competitive worldwide. Mr. Obama seemed to forget the lower-tax-rate part, didn’t he? Also, nearly all studies show that middle-income wage earners are the biggest beneficiaries of corporate tax cuts.

Regarding those evil one per-centers, according to the Tax Policy Center, the top 1% of Americans paid 33.4% of their expanded cash income in federal taxes in 2014. Meanwhile, Americans in the middle 20% paid only 13.7% of their income in federal taxes, while the poorest paid 3.1%. You’d think a good class warrior like Mr. Obama would like these numbers. Apparently not.

Why? He wants more money for government spending. A partial list includes more spending on child care, sick leave, equal pay, lower mortgage premiums, a higher minimum wage, student-debt forgiveness, tax credits, and free community college. Some say this could wind up costing $500 billion.

So there’s a lesson here for congressional Republicans and some of my fellow conservatives: Do not get sucked into this class-war politics. You will never outbid the Democrats on middle-class benefits. Take a cue from Ronald Reagan, who rejected class politics and argued that his policies would increase prosperity for all Americans.

For instance, Mr. Obama’s child tax credits would be available for couples up to $210,000, tripling the maximum tax credit for childcare by up to $3,000. That’s close to what some of my conservative friends want. But there’s a better way.

Get rid of the 10% bracket and collapse the 25% and 28% brackets down to 15%. So if you’re making $100,000 a year and paying $25,000 at the 25% bracket, your tax cost drops to $15,000 at the 15% bracket. That’s a $10,000 savings. If you have two kids, with a $3,500 tax credit per kid, that’s only a $7,000 savings.

From the lower marginal tax rates, the middle class gets a much bigger tax savings. With marginal rates coming down, the incentive effect kicks in as people keep more of what they earn. And all middle-class folks are included — married with children, single women without children, millennials without children, etc.

There’s still a big savings for the youngsters we love and cherish. But it’s done without class divisions or the targeted tax credits that Democrats love. (My only exception would be an expanded earned-income tax credit, which would have a longer phase-out period so as not to penalize folks moving from welfare to work.)

The former chairman of the Council of Economic Advisers, Glenn Hubbard, argues that “free community college, an enhanced tax credit for child care and higher taxes on high-income earners and large financial institutions” will not generate “growth, work, and opportunity.” Good advice, Republicans.