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Tuesday, January 13, 2009

Obama Drops Jobs-Credit Proposal

by Calculated Risk on 1/13/2009 12:06:00 AM

From the WaPo: Obama Shelves Jobs-Credit Proposal

Bowing to widespread Democratic skepticism, President-elect Barack Obama will drop his bid to include a business tax break he once touted in the economic stimulus bill now taking shape on Capitol Hill, aides said last night.

Obama suggested the $3,000-per-job credit last week as one of five individual and business tax incentives aimed at winning Republican support. He proposed $300 billion in tax relief in a bill that could reach $775 billion, and he resurrected the jobs-credit proposal from the campaign trail as one of his main provisions.
Obama advisers said further adjustments may be made to the president-elect's tax priorities, including to a proposed $500 payroll tax credit for individuals. ...

Obama also has suggested tax incentives for businesses to make capital investments. Such benefits are popular across party lines and have been successful in recent years. But another Obama proposal, to allow companies to deduct larger portions of recent losses, has raised eyebrows on the Hill, where lawmakers see it as a costly reward for behavior that was possibly irresponsible.
It's hard to analyze a plan without many details, but this seems like progress. The larger deductions for tax losses can be junked too, although the capital investment tax incentive is probably worthwhile since capital investment is falling off a cliff.