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 ...
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?
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.