Posted on 09/07/2010 10:31:47 AM PDT by Nachum
WASHINGTON — As part of his emerging program to jolt the economic recovery from its stall, President Obama will call this week for allowing businesses to deduct from their taxes through 2011 the full value of new equipment purchase, from computers to utility generators, to increase demand for goods and create jobs.
The upfront deduction would allow businesses of all sizes to keep more money now and would give large corporations, many of which are sitting on cash because of uncertainty about the economy, an incentive to spend and invest.
(Excerpt) Read more at nytimes.com ...
Desperation????
“...allowing businesses to deduct from their taxes through 2011 the full value of new equipment purchase...”
Ahhhhhhh...good. But tell me, Mr. POtuS, from where will we get the money to purchase the equipment to get the write off?
Ahole.
Obama, just get the hell out of the way!
Kramer : It’s just a write off for them .
Jerry : How is it a write off ?
Kramer : They just write it off .
Jerry : Write it off what ?
Kramer : Jerry all these big companies they write off everything
Jerry : You don’t even know what a write off is .
Kramer : Do you ?
Jerry : No . I don’t .
Kramer : But they do and they are the ones writing it off .
Desperation from the business hating democrats.
What a clueless idiot. Besides not having the money, the last thing my company needs right now is “equipment.”
This is not a tax cut. This is a tax deferral.
Normally, businesses depreciate capital equipment over a period of time, deducting only a percentage of the value each year. Allowing 100% depreciation in 2011 (it's too late for anything significant in 2010) simply means that a business can deduct the entire value in 2011.
If a particular item was normally on a 5-year depreciation schedule, the business would deduct 20% each year in 2011, 2012, 2013, 2014, and 2015. Deducting 100% in 2011 means that there will be no deductions for depreciation of that item in the remaining 4 years.
Depending on what happens to corporate tax rates in the interim, the business could pay more or less taxes in the long run. But, if they stay the same (and the business's average tax rate remains the same), there is no net reduction in taxes.
It's all smoke and mirrors. It's all "how can I look good for the next few months"? The man has no concept of deep changes that really grow an economy.
I’d rather see the voters write off Obama!
LOL!
Tax breaks for the rich?!?
How will that resonate with the class warfare theme that has soaked much of his voting base?
Rather then manufcature phoney tax credit gimmiacks, just cut the tax rates instead
This is even worse than his plan to make loans available for small businesses to meet their payrolls.
It would cost an estimated $200 billion in revenues, though the ultimate net loss would be $30 billion over 10 years, administration officials say, since businesses would eventually deduct the depreciated value of the equipment in any case.
I presume the projected $30 billion reduction over 10 years is the interest on the money that the government would have to borrow to fill the gap until they get the revenue from future tax receipts.
BINGO! Beat me to this comment.
What Zero will not tell you is that these TCs are for his targeted industries, like “green” businesses. Will not pass.
That is the best advice!
Hmmmmm indeed. Is it a serious effort on the part of Obama? Or is he floating it out there expecting the Republicans to shoot it down so he can make a campaign issue of it?
BIG desperation. It is a pure vapor ware lie. it has ZERO chance of passing and is just an election lie for the weak walleted.
This is more rhetoric over substance. These “breaks” will no doubt require compliance with strict government restrictions as to what type of equipment can be depreciated on this schedule. Why bother buying new equipment if there is no demand for a service or product. Furthermore, anything saved form depreciation will be eaten up by higher income, capital gains and health care taxes so why would business take the risk? To help do their share, hire workers and pay more in taxes? Right. This type of “bait and switch” happened with electronic medical records. Medical providers were promised rebates for buying electronic record systems but the requirement were so stringent that almost no one got the benefit.
This is just a way to say to the drone base and moderate Dims that he is really trying to help business. And when business does not respond, he will blame them for being greedy capitalist hoarders.
I like this idea since I’m self-employed.
Rush has mentioned this before and I think it bears repeating:
Why do the Dems always give tax cuts/breaks/credits when they want new businesses in their areas? They’re always so anti-tax, until they want growth, then they love to give tax breaks! Anyone see the irony here? Why aren’t they called out on it?
Indeed - and “propose before the elections” is far different from “pass and sign after the elections”
I’d rather have a new Congress that would do better, smarter things, Barry...
Extend the Bush tax cuts. Reduce tax rates further. Repeal Obamacare. That would pull the uncertainty off the horizon. As long as higher taxes and Obamacare are on the way, consumers will hold on to their money and businesses will have to reason to hire. People worried about just maintaining a job aren't going to commit to large purchases.
Just for a year so the numbers look better, then comes the income tax and oil tax and all the other taxes. No thanks, Bark Obama.
The GOP loses when it lets the Dems set the debate in terms of with or against. Instead they should copy what Gingrich and the GOP did running up to the 1994 elections. Gingrich et al made sure every Democrat bill was mirrored by a GOP alternative. That forced the debate to be on WHICH set of ideas was better.
So they write off 100% this year. What happens next year when they have no deductions at all?
The stuff business will buy from China?
What's being proposed here, as you've pointed out, isn't really a "tax cut" at all.
not a bad concept, but he is talking about a short duration “quick hit” of capital spending. Will only shift future purchases ahead in the calendar and leave us twice as slow down the road, just like Cash for Clunkers and the homebuyer credit.
This mixed-bag effort is garbage.
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