Posted on 09/06/2010 7:27:32 PM PDT by Blood of Tyrants
President Obama, in one of his most dramatic gestures to business, will propose that companies be allowed to write off 100 percent of their new investment in plant and equipment through 2011, a plan that White House economists say would cut business taxes by nearly $200 billion over two years.
The proposal, to be laid out Wednesday in a speech in Cleveland, tops a raft of announcements, from a proposed expansion of the research and experimentation tax credit to $50 billion in additional spending on roads, railways and runways. But unlike those two ideas, both familiar from Obama's 2008 campaign, the investment incentive would embrace a long-held wish by conservative economists that had never won support from either Republican or Democratic administrations.
(Excerpt) Read more at foxnews.com ...
He just can't bring himself to just cut taxes on the "rich" corporations while never realizing that CORPORATIONS DON'T PAY TAXES! They pass on taxes as a cost of business to the consumers.
Make the tax cuts permanent, Oh Oneness, and things won’t go as bad.
He is faintly proposing this.
“President Obama, in one of his most dramatic gestures to business, will propose that companies be allowed to write off 100 percent of their new investment in plant and equipment through 2011, a plan that White House economists say would cut business taxes by nearly $200 billion over two years. “
Companies do not need new plants and equipment. They need customers who are now unemployed because of hair-brained schemes that cost 700 billion dollars.
Just another pithy sound bite that the Republicans are free and encouraged to use.
The issue here is JOBS, and Obama appears to be unwilling to come to grips with it.
Where we’re you 20 months ago?
Sorry Obie, but GAAP ain't just that space between your ears.
An then the small print tells you that he’s at the same time proposing raising business taxes in other areas - for amounts that won’t be specified until some later date.
Ah...this is the part where Dem candidates paint the GOP as the “party of no” that doesn’t want to help business!
Wonder what’s going to happen to the Bush tax cuts?
Note how he packaged this bill with 50 billion in new spending, so if Repubs don’t go for it b/c of the spending, he can blame them for not wanting tax cuts, leading up to the November elections.
This will pass through the new Republican Congress and Senate in November, so just you hold on there, Obamy baby!
The problem is really not Obama, the real problem is the democrats, Obama is their spokesman for their party of idealist socialism, it not just Obama, it's the whole bunch of them. A lot of people hate me because I keep preaching that the policies of Obama are the policies of the Democrats so you need to stop just blaming Obama. For some reason a lot of people can not see that there is no conservative democrats, they are all socialists, the blue dog democrats are a thing of the long long past, long gone, we need to push that message on FR.
The others, of course, GET THE BOOT!
I agree, an across-the-board cut would be even better.
However, allowing ALL capital investment to be deductible in 2010 and 2011 is the next best thing. Well, as long as it comes with no strings attached.
Certain buiness expenses have to be written off over a number of years. Others may be expensed ad they occur, office supplies, phone bills, power bills etc. Large ticket items are ‘’written off’’ over a longer period of time as a favor to the tax collecter, not the business.
The GOP should jump on ANY tax breaks that Obastard suggests and then go back and ask for more, pointing out the problems with temporary and narrow tax cuts.
this is the reason we are in a Social Depression. The obmanation strikes again... against America.
Yep. The problem is NOT lack of manufacturing capacity or even efficiency. The problem is that the companies don’t have CUSTOMERS to buy their products.
Note that this does nothing to help small businesses, the creators of 70% of all new jobs.
This is like the tax break for hiring new employees: several thousand dollars worth of tax write-offs in return for $50K in salary, Workman’s Comp and health insurance expenses to the business.
Dumbass.
If you are struggling to survive, you aren’t going to put out more money for capital projects just because it is deductible.
Remember the Saturn plant in Springhill Tennessee. He punished Tenn and the south for voting Republican, by shutting that plant down and giving the jobs to Michigan. There going to be some bitter years in the south over it.
Another guess is the tax breaks will be for Green Jobs, either way I'm sure it is stealing money for the tax payer to give to their businesses of choice.
PROOF THAT KEYNESIAN ECONOMICS IS AN ABYSMAL FAILURE. The problem is these "tax cuts" are only through 2011 which will only spur minimal capital investment for Q4/2010 through Q3/2011. After that we're right back where we are today and will remain here until sustained tax relief that spurs long term growth is passed.
As we all know, that won't happen until after the 2012 Presidential Elections and the end of Obummer's first and only term in office.
For a 2 year reprieve on what I can spend up-front before end of 2011, I then have much higher taxes far into the future in health care, obama denial of bush tax cuts, cap n tax, vat tax, and other democratic increases.
No thanks.
So the GOP should jump on it and pass it saying that they are for tax cuts whenever they can get them but that this won’t work for all the reasons listed above.
“CORPORATIONS DON’T PAY TAXES! “
Start a corporation for 10 years oh wise one and tell me if Corporations don’t pay taxes1 Moron!
Why then aren’t they hiring?
Corporation S Owner!
smoke and mirrors....
he wants to KILL capitalism.
I have a sister that “toasted to the end of capitalism” a couple years ago with champagne.
She then sent $$$$ to the Obama campaign and voted for the sleezey, lazy, gay usurper.
And YES....she’s a Harvard graduate and works as a “teacher”. (but, I bet you KNEW that.....)
Why would anyone create more capacity in a market with excess capacity, even with incentives? Of course, not every market has excess capacity. Would you have been against expanding smartphone capacity a few years ago?
I can see this blowing up in his face when companies that are labor-intensive use it to build new automated production lines, and then close the old plants and cut their work force, resulting in higher unemployment.
Only if the plants have the cash on hand to spend.
Sounds like he is looking for flashy headlines that will hopefully limit the damage he’s facing in November.
Companies that have new ideas or new technologies that buy plants and equipment create new jobs, and the people who get those jobs will become new customers.
“Where we’re you 20 months ago?”
Exactly my thoughts. Obama waits until the November elections are near then all of a sudden proposes these job bills and tax breaks. This is so obvious even a blind man can see it. Where was he a year ago or like you said 20 months ago? Just pathetic election engineering.
And some confidence there will be a market left to produce for.
Ask a relevant question.
Correct me if I'm wrong, but immediate expensing of capital equipment just means that tax reduction through depreciation of the equipment is moved up to the current year. So if you spend $5,000,000 on a machine with a 5 year depreciation schedule you could deduct $1,000,000 per year as a business expense. If you were going to buy the machine anyways, that means with the immediate deduction you have $4,000,000 lower net income this year, but $1,000,000 more than you would have for each of the next four years. Net change = $0. Money now is better than money later, but it's still just shuffling when the deduction happens.
How is this different from Cash for Clunkers and the housing tax credit since it would just shifting future purchases to the present and reducing future purchases?
Hey idiot: how about the Bush Cuts? I’m going to lose 2k out of pocket when those expire.
Mercantilism has been pretty well abandoned as an economic doctrine particularly since piling up unsaleable stuff has so many times proved to be a losing strategy!
If you increase productivity and make stuff cheaper, you will probably need fewer employees, yet the people still earning a living somewhere will have more disposable income because, lo and behold, they can buy stuff cheaper.
The unemployed remain unemployed under all these scenarios.
If you think there's still some fire in Mercantilism fire away ~
And I could easily write the script for the GOP to counter this.
First, tell Obama to bring these temporary tax cuts on and pledge to pass them, saying that they will take ANY tax cuts they can get, but explain why it won’t work.
Well, it also allows 100% deduction on labor, which is usually a large portion of capital investments. Normally, when you take a $5 million deduction (a deduction off your gross), you only get 36% (or whatever your tax rate is) off your taxes.
I think that this is different as it allows you to take ALL of the capital costs off your taxes.
I agree wholeheartedly.
However, not ALL businesses are struggling to survive, even now. Some have adapted to the new reality and are doing OK.
Has the smartphone market added to our GDP or not? Has it created American jobs or not?
I'm not talking about any particular "ism."
I'm not an accountant, but I am an accounting student.
Aren't capital investments already fully tax deductible?
Just somethin’ that sounds good....we’ve all heard in before...still NO jobs...tankin’ economy....should of thought through the hideous actions you took against Americans and America months ago...the chickens have come home to roost...sucker...
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.