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Time to invest in new robotic labor saving equipment.
CG: Good to see that Obama has remained firm on his dedication to the philosophy of corporate welfare and trickle down economics to stimulate the economy. Corporations need your money, and Barack Obama is going to make sure that they get it.
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WASHINGTON – President Barack Obama will call on Congress to pass new tax breaks that would allow businesses to write off 100 percent of their new capital investments through 2011, the latest in a series of proposals the White House is rolling out in hopes of showing action on the economy ahead of the November elections.
An administration official said the tax breaks would save businesses $200 billion over two years, allowing companies to have more cash on hand. The president will outline the proposal during a speech on the economy in Cleveland Wednesday.
Amid an uptick in unemployment to 9.6 percent, and polls showing that the November election could be dismal for Democrats, Obama has promised to propose new steps to stimulate the economy. In addition to the business investment tax breaks, he will also call for a $50 billion infrastructure investment and a permanent expansion of research and development tax credits for companies.
The proposals would require congressional approval, which is highly uncertain given Washington's partisan atmosphere and the approaching midterm elections — a reality that's not lost on the White House.
"We understand what season we've entered in Washington," White House spokesman Robert Gibbs said Tuesday. "We certainly hope that there are measures, including some of the ones that the president will outline, that Congress will consider. If they don't do that prior to the election, the president and the economic team still believe that these represent some very important ideas."
Republicans were quick to attack the president's proposals for missing the mark.
"The White House is missing the big picture. None of its plans address the two big problems that are hurting our economy: excessive government spending, and the uncertainty that their policies....are creating for small businesses," House Minority Leader John Boehner said.
With the public growing increasingly concerned about the mounting federal deficit, the White House has been careful to avoid labeling their proposals as a stimulus program, hoping to avoid drawing comparisons to the massive $814 billion stimulus Obama signed last year.
"I don't think this is anything near the level of what was enacted near the beginning of the administration," Gibbs said.
Even if legislators could pass some of the proposals in the short window between their return to Capitol Hill in mid-September and the elections, it's unlikely the efforts would significantly stimulate the economy by November.
The tax breaks for capital investments Obama is proposing would build on stimulus measures enacted in 2008 and 2009 that allowed businesses to depreciate 50 percent of their capital investments. A separate small business bill the White House is urging the Senate to pass would extend that tax break through the end of this year.
If Congress passes the administration's proposal to expand the tax breaks to 100 percent, several million people and 1.5 million businesses would benefit, said the administration official, who spoke on the condition of anonymity because the formal announcement has not been made.
The official estimated the ultimate cost to taxpayers over 10 years would be $30 billion, with most of the money lost in tax revenue being recouped as the economy strengthens.
http://news.yahoo.com/s/ap/20100907/...ZmaWNpYWxvYmFt
Time to invest in new robotic labor saving equipment.
5,4,3,2,1..
dead enders coming to about this plan....
Maybe more Korean golf carts...
Maybe a new Isuzu diesel cab-over flatbed...
tax breaks to corps enrich the corps mgmt (just like they pocket the savings from killing 10s of 1000s of jobs) and maybe shareholders, not the employees or society.
business and capitalists are spending $400M on the Repugs, while calling Magic Negro Atilla the Hun and Hitler.
What an idiot.
Goldman Sachs OWNS Obama.
Why Obama Is Proposing Whopping Corporate Tax Cuts, and Why He’s Wrong
Tuesday, September 7, 2010
President Obama reportedly will propose two big corporate tax cuts this week.
One would expand and make permanent the research and experimentation tax credit, at a cost of about $100 billion over the next ten years. The other would allow companies to write off 100 percent of their new investments in plant and equipment between now and the end of 2011 at a cost next year of substantially more than $100 billion (but a ten-year cost of about $30 billion since those write-offs wouldn’t be taken over the longer-term).
The economy needs two whopping corporate tax cuts right now as much as someone with a serious heart condition needs Botox.
The reason businesses aren’t investing in new plant and equipment has nothing to do with the cost of capital. It’s because they don’t need the additional capacity. There isn’t enough demand for their goods and services to justify it. Consumers aren’t buying because they’re trying to come out from under a huge debt load, including mortgage debt; they have to start saving because their nest eggs are worth substantially less; and they’ve lost or are worried about losing jobs and pay.
In any event, small businesses don’t have enough profits against which to use these tax credits and deductions, and large corporations are sitting on over a trillion dollars of profits and don’t need them.
Republicans and corporate lobbyists have been demanding tax cuts on corporate investments for one reason: Big corporations are investing in automated equipment, robotics, numerically-controlled machine tools, and software. These investments are designed to boost profits by permanently replacing workers and cutting payrolls. The tax breaks Obama is proposing would make such investments all the more profitable.
In sum, Obama’s proposed corporate tax cuts
(1) won’t generate more jobs because they don’t put any cash in worker’s pockets (as would, for example, exempting the first $20,000 of income from the payroll tax and making up the difference by applying the payroll tax to incomes over $250,000);
(2) will subsidize companies to cut even more jobs; and
(3) will cost $130 billion — money that could better be spent helping states and locales avoid laying off thousands of teachers, fire fighters, and police.
So why is Obama proposing them? To put Republicans in a bind. If they refuse to go along he can justifiably say they have no agenda other than obstruction. After all, the only thing they’ve been arguing for is lower taxes. On the other hand, if Republicans agree to support these corporate tax cuts, Obama can claim a legislative victory that will help Democrats neutralize their opponents in the upcoming elections.
The proposals also make it harder for Republicans to argue the Bush income tax cuts should be extended for the richest 3 percent of taxpayers because small businesses need it. Obama’s corporate tax cuts would appear to do the trick.
The White House probably figures even if Republicans agree to the proposed tax cuts, nothing will come of it. Congress will be in session for only about two weeks between now and the midterm elections so it’s doubtful these proposals would be enacted in any event.
But this cynical exercise could backfire if Republicans call Obama’s bluff and demand the corporate tax cuts be put on a fast track and get signed into legislation before the midterms.
More troubling, Obama’s whopping proposed corporate tax cuts help legitimize the supply-side dogma that the economy’s biggest obstacle to growth is the cost of capital, rather than the plight of ordinary working people.
http://robertreich.org/
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yep, companies will get tax breaks to invest in systems that exclude employees.
The economy needs two whopping corporate tax cuts right now as much as someone with a serious heart condition needs Botox.
PROVE IT!
what the president did was not suppose to bet unemployment hight then 9 it is 11 in same states!
English: Do you speak it?
do you read it
Was that a question? See, sentences are usually begun with capitlization, and then ended with some sort of punctuation, like a period, exclamation mark, or question mark. I'm assuming you needed the latter. Let me help you with that.
There you go. To answer your question, yes. Yes I do.
When I first heard this news, my thought was "who would think this is really a good incentive?"
It is normal for business to write off equipment year by year. Having all the deduction in one year means it cannot partially be deducted in future years. In the end, isn't it just paying less taxes now to pay more later, because of less write-offs later?
It can take the sting out of writing that check for new equipment if you have a big enough tax liability to cover it, but this is a credit that helps big business a lot more than small business. Small business owners/managers typically pay themselves a small salary. In good years when they have profit they bonus the profit out to avoid double taxation of the earnings (corporate + personal) so they don't typically have large tax liabilities to offset credits with.
I read the ploy here is to finance these tax breaks with letting dubya's tax cuts on the wealthy expire and cutting/stopping subsidies and tax breaks for oil.
How bout we just cut the tax breaks and DON'T spend the money on anything new? This proposed 50 Billion is nothing more than a pre-election ad campaign for Obama/Democrats trying to say "See, we really care about you and the economy!" that will do NOTHING to stimulate jobs or the economy.
What makes you think the corporate welfare loving democrats have any interest in stopping big oil tax breaks?
Apparently Obama is more interested in licking the boots of corporations for electoral reasons than stimulating the economy or setting main street back on its feet.
Funny, I thought that was the specialty of the evil Repugs. I guess corporatism is a bipartisan sport too.
You may have heard "America is ed". The corps own ALL of DC, both parties.
I will be the first to be surprised if any corporate welfare programs are cut, and if the wealthy lose their 100s of $Bs in tax cuts.
Corporate-Americans are spending $400M on getting their Repug friends elected.
I won't be surprised if the Simpson/Peterson "Let's the Lower 95% Harder and Faster" Deficit Charade Commission raises FICA, cuts in Medicare/Medicaid/SocSec retirement payouts, and raises the retirement age to near 70.
Oh, did you hear? AMERICA IS ED
If they do, it will be with Obama's blessing. Who empaneled them and why?
The composition of the panel clearly highly political. Who knows WTF calculations went in it?
Like all commission reports (like the 9/11 Commission), the Exec can just ignore it.
Clintonesque triangulation is much more likely, don't you think?
Counterpoint to Reich:
http://gregmankiw.blogspot.com/2010/...direction.html
"The trick to restoring aggregate demand and full employment is to channel that saving into investment."
It's The Jobs, Stupid.
It's The Mortgages, Stupid.
It Ain't Investment Breaks For Businesses, Stupid. (aka "impact will be relatively modest.")
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