Tuesday, January 13, 2009

Small Business Tax Incentive Cut from Stimulus Package – Obama bows to Democrats Objections

The $3,000 job creation tax credit to small businesses which had been included President-Elect, Obama’s stimulus package, has been cut due to objections by Democrat legislators. According to Business Week, the Small Business Tax Credit formulated to stimulate job creation, was an part of a larger plan that was “expected to include”: a longer period of time for small businesses to “carry back” losses, an incentive to invest in improvements, and the tax credit for job creation.

Although the loss of the tax credit is being touted as an addition to the stimulus package designed to gain Republican approval by most media - small business tax breaks were part and parcel of the Obama-Biden campaign platform, which included exemption from capital gains.

Congressional Democrats argued that the tax cut included in the stimulus package was “ripe for abuse and difficult to administer.” Apparently, Democrats believe that giving billions of dollars to cities and states for construction projects instead, will be much easier to keep tract of, let alone, be subject to any abuse. One only needs to look at how well the infamous “Big Dig” worked out, to understand what this stimulus package could end up costing the taxpayer.

Therefore, it boggles the mind that Democrats are concerned about giving a $3,000 tax cut to small businesses, while having no concerns at all regarding state and local governments and construction projects. One can be fairly certain that any other “tax cuts” proposed in the stimulus plan, or any other package proposed by the President Elect on the campaign trail or otherwise, will be treated in much the same way. Tax cuts, of any type, are anathema to most Democrats, who, also using similar language regarding the proposed “middle class tax cuts”. The question now remains, will history repeat itself and any proposed tax cuts become tax increases under the new administration?

1 comment:

Chuck said...

I think you will see a loot of this. Make a show of putting a tax cut in a bill for instance aqnd then later quietly removing it.

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