Obama: $300 billion in tax cuts
President-elect Barack Obama was set Monday to begin the push for a massive package of tax cuts and spending proposals aimed at reviving an economy mired in recession.
Obama is meeting with top legislators from both parties including House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., as well as Senate Minority Leader Mitch McConnell, R-Ky., and House Minority Leader John Boehner, R-Ohio.
Obama is also planning to deliver a major speech on the economy on Thursday, a senior Democratic official told CNN.
The president-elect will propose roughly $300 billion in tax cuts for individuals and businesses. He has not publicly put a price tag on his overall stimulus plan, though his advisers have said they expect it to fall between $675 billion and $775 billion, 40% of which would be in tax cuts.
According to an Obama spokesman, several tax breaks are under serious consideration.
Middle-class tax cut: Obama would offer a tax cut equal to $500 a year for individuals and $1,000 for couples. The credit would work essentially as a payroll tax credit, meaning the money could be delivered fairly quickly. Companies could simply reduce the tax they withhold from employees' paychecks.
The tax credit is likely to be offered only to those below a certain income level, but the Obama team hasn't specified where the cut-off point would be. The credit also would be refundable, meaning that even tax filers without any tax liability -- typically very low-income workers -- would receive one.
Business break for losses: Obama is considering a tax break for businesses that book losses in 2008 and 2009.
The stimulus plan may extend what's called the net-operating loss carryback to five years, up from two years currently. The provision lets companies apply their losses to past and future tax bills so that they can get money back on taxes they've already paid or would otherwise have to pay.
Job creation: Obama would establish a new credit for businesses that either create jobs in the United States or or avoid layoffs.
Small business write-off: Obama would increase the amount of expenses small businesses can write off to $250,000 in 2009 and 2010, up from $125,000 currently.
While political observers believe the now-added emphasis on business tax cuts as a major part of a stimulus package is one way the Obama team hopes to attract Republican support, that's not how the Obama camp sees it.
"We're working with Congress to develop a tax-cut package based on a simple principle - what will have the biggest and most immediate impact on creating private sector jobs and strengthening the middle class. We're guided by what works, not by any ideology or special interests," an Obama spokesperson told CNNMoney.com in an email.
link
http://money.cnn.com/2009/01/05/news/economy/obama_stimulus/index.htm?postversion=2009010505
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