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Obama to Propose Massive Tax Breaks for Businesses to Invest in Growth
Foxnews.com ^ | 9/6/2010 | Unknown

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 ...


TOPICS: Breaking News; Business/Economy; Government; News/Current Events; Politics/Elections
KEYWORDS: business; economy; misleadingtitle; obama; obamalies; taxes
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To: ding_dong_daddy_from_dumas

LOL!!


121 posted on 09/07/2010 8:40:58 AM PDT by stephenjohnbanker (((.Go troops! " Vote out RINOS. They screw you EVERY time" Jim Robinson)
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To: EQAndyBuzz

Therin is the rub, these companies need paying customers, which is in short supply these days.

A tax credit for investing in the businesess assumes that you have spare capital available to invest.

If you’re running to just make payroll and not get swallowed up by debt, this is meaningless.


122 posted on 09/07/2010 8:57:00 AM PDT by Ouderkirk (Democrats...the party of Slavery, Segregation, Sodomy, and Sedition)
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To: Blood of Tyrants

What entrepreneurs and most good businessmen want is FREDOM but they will never understand that..............


123 posted on 09/07/2010 8:59:52 AM PDT by PeterPrinciple ( Seeking the truth here folks.)
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To: Blood of Tyrants
This is actually the only good idea he's had on the economy. Of course, if it comes at the cost of raising taxes on the highest tax bracket, then it's not worth it.

But, by itself, to allow full expensing of CAPX and R&D is a great idea for stimulus. Lot's of conservative economists were calling for it last year.

124 posted on 09/07/2010 9:05:02 AM PDT by curiosity
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To: gov_bean_ counter
Sorry Obie, but GAAP ain't just that space between your ears.

This would only effect accoutning for tax purposes, not financial reporting purposes. Captial investment is already treated differently for the two, with must faster depreciation allowed for tax purposes. This proposal would only accelerate it further, an making it immediate.

125 posted on 09/07/2010 9:07:34 AM PDT by curiosity
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To: Blood of Tyrants
I talked to a small business owner this holiday weekend who has been downsizing all this year. Dropped one employee and is moving to another space when their lease is up next month. Office space for equal or better quarters is half of current lease. Because of new regulations and taxes from all quarters, along with pending imposition of health care requirements, all of the measures to cut expenses will not cover the new outgo. So, their previous office will probably go unoccupied because there are many equally nice ones to choose from at much lower rates, leaving that building owner paying less taxes because of income loss. The new office, while a good deal for new occupants, is probably also losing because it was financed for more than can be gotten from tenants caught in this economic horror visited on them by the democratic socialists in control of the US treasury. Loses which will not be fixed by anything short of booting out of office all of those bent on destroying this Republic. No stimulus, under whatever guise, will convince a sober minded small business owner that the benefits will accrue to them either now or in the future.
126 posted on 09/07/2010 9:08:09 AM PDT by mountainfolk (God Bless the United States of America)
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To: Repealthe17thAmendment
Aren't capital investments already fully tax deductible?

Not immediately. Currently, you have to depreciate the asset over time, and you can only write off the depreciation charge in a given year. Effectively, this proposal would just shift all of the writeoff to the current year.

127 posted on 09/07/2010 9:09:53 AM PDT by curiosity
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To: Mariner
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.

Glad to see not everyone here is succubming to knee-jerk anti-Obamaism.

128 posted on 09/07/2010 9:11:12 AM PDT by curiosity
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To: curiosity

Yes, but it will only work for companies already planning to spend the money and who have it to spend. And then it will only serve to accelerate the spending for 2012 and 2013 to 2011. In essence, it is another cash for clunkers deal for people who are already in the market and planned on spending the money anyway.


129 posted on 09/07/2010 9:40:34 AM PDT by Blood of Tyrants (Islam is the religion of Satan and Mohammed was his minion.)
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To: Blood of Tyrants
Yes, but it will only work for companies already planning to spend the money and who have it to spend.

Medium and large corporations are piling up record amounts of cash. There is no lack of money to spend.

And then it will only serve to accelerate the spending for 2012 and 2013 to 2011.

True, but it will still help. If you increase demand for capital goods today, you put to use unemployed resources today, which in turn raises national income, which leads to more demand for capital projects, which puts more unemployed resources to work, etc. That is how stimulus is supposed to work.

130 posted on 09/07/2010 10:03:59 AM PDT by curiosity
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To: poobear
Start a corporation for 10 years oh wise one and tell me if Corporations don’t pay taxes1 Moron!

Corporations only "pay" taxes if they make a profit, which only happens if consumers pay enough in prices for the corporations' product to cover the cost of the taxes. So, corporate taxes are PAID by consumers and merely collected by the corporation. Most people who take an economics class in high school or college learn this simple fact during the sessions on taxation and forms of businesses.

131 posted on 09/07/2010 10:13:11 AM PDT by VRWCmember (Jesus called us to be Salt and Light, not Vinegar and Water.)
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To: Blood of Tyrants

Businesses that dare enter the web will become entangled. Lets have more businesses become dependent on the state so they can dance when the state pulls the strings.

Sounds like a plan. (That sucks the life out of capitalism)


132 posted on 09/07/2010 10:15:53 AM PDT by listenhillary (A 50% cut of federal spending would be a good place to start.)
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To: Blood of Tyrants

At best, a one-shot injection. The problem is that even though the tax benefit may be attractive in the short term, the longer outlook for the economy is still pretty dismal.

I wouldn’t be basing my business strategy on a tax cut.


133 posted on 09/07/2010 10:17:56 AM PDT by voicereason (I Don't Need SEX...I Get Screwed By Democrats Everyday!!!)
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To: VRWCmember

So I should lower my prices and lay off my remaining employees to make less profit? IOW shut my business down.

Now there is a way to pay no corporate taxes!

Incidentally, I’m an Engineer with a business degree.


134 posted on 09/07/2010 10:23:52 AM PDT by poobear ("The greatest tyrannies are always perpetrated in the name of the noblest causes." -- Thomas Paine)
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To: curiosity

The problem is Obama. Businesses are holding onto their cash because they are uncertain what the future will bring. And as long as he is in charge of all the government agencies that can ans will literally regulate many, many businesses out of existence, they will not take as many chances.


135 posted on 09/07/2010 10:26:18 AM PDT by Blood of Tyrants (Islam is the religion of Satan and Mohammed was his minion.)
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To: curiosity
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.

Glad to see not everyone here is succubming to knee-jerk anti-Obamaism.

The string attached is what happens in 2012 after you have been dancing to the tax man's tune. Remember, this administration has not done a SINGLE DAMN THING without strings attached. Why would you believe them now?

136 posted on 09/07/2010 10:29:09 AM PDT by listenhillary (A 50% cut of federal spending would be a good place to start.)
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To: Blood of Tyrants
The problem is Obama. Businesses are holding onto their cash because they are uncertain what the future will bring.

I agree. However, the proposal to allow immediate expensing of CAPX will still help.

137 posted on 09/07/2010 10:36:23 AM PDT by curiosity
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To: listenhillary
The string attached is what happens in 2012 after you have been dancing to the tax man's tune. Remember, this administration has not done a SINGLE DAMN THING without strings attached. Why would you believe them now?

The string is going to be the tax rate in the highest 2 brackets going up, and I agree it is not worth it. However, if the GOP can seperate out the CAPX expensing provision, then it would be worthwhile to vote for it.

138 posted on 09/07/2010 10:40:01 AM PDT by curiosity
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To: poobear

If corporate taxes were eliminated tomorrow, would you offer your service for the same price? Would all of the people offering the same service keep their price the same?

If I was competing for customers, I would surely drop my price if the corporate tax went away.

Say you charged $150.00 for your service and I now charge $100.00 for the same service. Why can the customer get a better deal from me? Because the tax imposed by the the government has gone away.

If the corporate tax doubled tomorrow, how high would you have to raise the price for the service you offered to continue making money?

Doesn’t the consumer of your service or product end up paying the corporate tax though inflated costs for products and services?


139 posted on 09/07/2010 10:40:16 AM PDT by listenhillary (A 50% cut of federal spending would be a good place to start.)
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To: curiosity

Yea, it’s great for people who were planning on spending the money anyway. But as with every tax break that Obastard suggests, it is only temporary while all his tax increases and wealth stealing regulations are permanent.


140 posted on 09/07/2010 10:56:25 AM PDT by Blood of Tyrants (Islam is the religion of Satan and Mohammed was his minion.)
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