Barack Obama has exclaimed that, “The economy is very sick, The situation is getting worse. … We have to act and act now to break the momentum of this recession.”
As a result, tax cuts are the first surprise from the Obama administration in 2009. The proposed “Tax increases for the rich” were tabled a short while ago, and now tax cuts are reverberating throughout Washington as a result of the U.S. economy. This comes as quite a surprise to many Republicans, as they are typically known for their tax cutting policies.
While Democrats in Congress have mainly talked up spending on infrastructure, social programs and aid to states, the incoming administration pulled some pages from the GOP playbook.
In addition to $150 billion in individual tax cuts, the Obama team is said to have embraced two business tax breaks promoted by House Republican Leader John Boehner.
Here are the non-partisan facts about the tax cuts:
Obama’s proposal to stimulate the economy includes tax cuts of up to $300 billion — including $500 for most individuals and $1,000 for couples if one spouse is employed — as well as more than $100 billion for businesses, an Obama transition official said. The total value of the tax cuts would be significantly higher than had been signaled earlier.
New federal spending, also aimed at boosting the floundering economy, could push the overall package to the range of $800 billion or so. Some $77 billion would be used to extend unemployment benefits and to subsidize health care for people who have lost their jobs.
The rest would go toward job-creation projects such as roads and bridges and toward long-term goals such as alternative energy programs.
The Obama plan’s tax cuts for individuals and couples would be a bit different from the rebate checks sent out last year by the Bush administration and Congress in a bid to boost the slowing economy. The relief this time around would be awarded by withholding less from worker paychecks. That provision would cost about $140-150 billion over two years.
For businesses, the plan would allow firms incurring losses last year to take a credit against profits dating back five years instead of the two years currently allowed.
Another provision brought to the negotiations by the Obama team would award a one-year tax credit costing $40-50 billion to companies that hire new workers, and would provide other incentives for business investment in new equipment.
All of these developments have definitely caught my eye. I for one, am a proponent of rewarding business by more favorable taxation policies. However, like so many programs enacted over the previous 4 months, I tend to wonder where all of this money is coming from? After all, last time I checked, it still doesn’t grow on trees.
Tags: 2009 Economy, Barack Obama, Economic Crisis, Obama Economic Plan, Tax Cut, Tax Cuts
This entry was posted
on Tuesday, January 6th, 2009 at 6:36 pm by admin and is filed under 2009 Economy.
You can follow any responses to this entry through the RSS 2.0 feed.
Both comments and pings are currently closed.
[...] Source:Obama: Economy is “bad and getting worse” [...]
This whole economic demise is just another example of to much money being paid to those over educated individuals who are suppose to serve as a shield to maintain order within our economic structure.
I was once considered a middle class American, but because of some bad personal decisions I am now earning a hourly rate that, I earned back in the early 80’s and expected to survive on such an income.
It infuriates me when our government can give money to huge corporations such as GM and Chrysler who throughout the negligence of their senior management ignored every market indicator for the past three decades to restructure themselves to avoid financial disaster. Instead executives of all major corporations are more concerned about their outrageous salaries and bonuses.
Has anyone really examined what impact those salaries really have on our economic stability? Does anyone consider how many units of production have to be produced just to pay a CEO. That is the primary reason American jobs are lost to foreign competition. Americans as a whole are to pre-occupied with sports and other interests to really understand what is really going on. The old thought is ” if it doesn’t affect me than I don’t care or don’t have to worry about.
Those days are gone. As millions of Americans are estimated to lose their homes over the next few years I believe we all have a common concern and we better get together to fight it.
We as a tax paying American need to demand the resignations of politicians who are not acting in the best interest of those who put them in their positions. We have to stop sitting back and waiting for the chips to fall.
The tax cuts that Obama speaks of will come at a huge cost to the American public. The largest percentage of relief will be afforded to corporations not the average individual.
Trickle down economics is the game being played and it clearly doesn’t work. We are band aiding the auto industry and the average person cannot afford to purchase a new vehicle. Just ride past any auto dealership and look at the inventory on the lot. Failure for the big three is eminent and all that money will be lost, unpaid!
It would be better to put the money in the hands of the American public to stimulate the economy. Homes wouldn’t be foreclosed,entrepreneurs would step up and that’s where jobs will be created, not with existing corporations. As an example, look what going on with the bailout money thus far. Extravagant meetings in secret places football bowl game sponsorships. Who’s being held accountable NO ONE. That’s why we are where we are.
Obama for change, sounds rhetorical to me, sounds like the same old story!