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05 January 2009

Obama Tax Cuts

Obama and the country face serious challenges with the economy and the plan to right the ship. There have been 2 million job losses in the first 11 months of 2008, the economy has stagnated, the stock market suffered its worst year since the Great Depression and housing prices have fallen while foreclosures have risen.

Most States are facing budget shortfalls and may be required to cut spending and raise taxes.

While many economist predict a stimulus package exceeding $1 trillion, the Obama camp puts it closer to $750 billion.

The plan will include tax cuts, breaks for small businesses, job creation credits and increased write-offs of expenses.

The tax credit could be a $500 cut for individuals and $1,000 for couples and would become part of the payroll system, meaning the cut would reduce the tax deducted from a workers paycheck so people would get the money right away. If a person doesn't have any tax liability, a refund could be issued to that person.

Currently businesses can carry-back losses for 2 years. Under Obama's plan that would be extended to 5 years, so businesses can carry-back or forward business losses and apply that to past or future tax bills.

Obama would establish a new tax credit for businesses that create jobs or avoid layoffs.

For 2009 and 2010, small businesses would be allowed to write-off expenses up to $250,000, up from $125,000.

Obama's team is looking for a plan that will have the fastest impact on jobs and economic stimulus.

Other parts of the President-Elects proposal will include:

  • double renewable energy production and make public buildings more energy efficient;
  • rebuild crumbling roads, bridges and schools;
  • computerize the health care system;
  • and modernize classrooms, labs and libraries.

Everyone agrees that the country needs a plan that will help avoid a steeper economic downturn and creates jobs in the short term and growth and competitiveness in the long term.

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