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  1. #1
    Senior Member JohnDoe2's Avatar
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    Obama Eyes $300 Billion Tax Cut for individuals, co.

    JANUARY 5, 2009

    Obama Eyes $300 Billion Tax Cut

    Huge Breaks for Firms, Individuals Are Aimed at Winning GOP Support for StimulusArticle

    By JONATHAN WEISMAN and NAFTALI BENDAVID
    WASHINGTON -- President-elect Barack Obama and congressional Democrats are crafting a plan to offer about $300 billion of tax cuts to individuals and businesses, a move aimed at attracting Republican support for an economic-stimulus package and prodding companies to create jobs.

    The size of the proposed tax cuts -- which would account for about 40% of a stimulus package that could reach $775 billion over two years -- is greater than many on both sides of the aisle in Congress had anticipated. It may make it easier to win over Republicans who have stressed that any initiative should rely more heavily on tax cuts rather than spending.


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    President-elect Barack Obama and congressional Democrats are crafting a plan to offer as much as $310 billion of tax cuts.
    The Obama tax-cut proposals, if enacted, could pack more punch in two years than either of President George W. Bush's tax cuts did in their first two years. Mr. Bush's 10-year, $1.35 trillion tax cut of 2001, considered the largest in history, contained $174 billion of cuts during its first two full years, according to Congress's Joint Committee on Taxation. The second-largest tax cut -- the 10-year, $350 billion package engineered by Mr. Bush in 2003 -- contained $231 billion in 2004 and 2005.

    Republicans and business leaders hadn't seen specifics of the proposals Sunday night, but welcomed the idea of basing a bigger proportion of the stimulus plan on tax cuts. Their response suggests the legislation could attract relatively broad support, and it highlighted the Obama team's determination to win backing from varied interests.

    Some Republicans, including Senate Minority Leader Mitch McConnell (R., Ky.), have warned against a careless stimulus plan that enables unfettered spending.

    The largest piece of tax relief in the new plan would involve cuts for people who pay income taxes or who claim the earned-income credit, a refund designed to lessen the impact of payroll taxes on low- and moderate-income workers. This component would serve as a down payment on the "Making Work Pay" proposal Mr. Obama outlined during his election campaign, giving a credit of $500 per individual or $1,000 per family.

    Discuss
    What is the right balance between tax cuts and spending for the economic stimulus package?On the campaign trail, Mr. Obama said he would phase out a similar tax-credit proposal at around $200,000 per household, but aides said they haven't settled on an income cap for the latest proposal. This part of the plan is similar to a bipartisan initiative launched in early 2008, which sent out checks worth $131 billion.

    Economists of all political stripes widely agree the checks sent out last spring were ineffective in stemming the economic slide, partly because many strapped consumers paid bills or saved the cash rather than spend it. But Obama aides wanted a provision that could get money into consumers' hands fast, and hope they will be persuaded to spend money this time if the credit is made a permanent feature of the tax code.

    As for the business tax package, a key provision would allow companies to write off huge losses incurred last year, as well as any losses from 2009, to retroactively reduce tax bills dating back five years. Obama aides note that businesses would have been able to claim most of the tax write-offs on future tax returns, and the proposal simply accelerates those write-offs to make them available in the current tax season, when a lack of available credit is leaving many companies short of cash.

    A second provision would entice firms to plow that money back into new investment. The write-offs would be retroactive to expenditures made as of Jan. 1, 2009, to ensure that companies don't sit on their money until after Congress passes the measure.

    Another element would offer a one-year tax credit for companies that make new hires or forgo layoffs, which could be worth $40 billion to $50 billion. And the Obama plan also would allow small businesses to write off a broad range expenditures worth up to $250,000 in 2009 and 2010. Currently, the limit is $175,000.

    William Gale, a tax-policy analyst at the Brookings Institution think tank in Washington, said the scale of the whole package is larger than expected. He called the business offerings a true surprise, since most attention has been focused on the spending side of the equation, especially the hundreds of billions of dollars being discussed for infrastructure and aid to state and local governments.

    "On the other hand, it was hard to figure out how they were going to spend all that money in intelligent ways, so it makes sense to do more on the tax side," Mr. Gale said. His biggest question about the latest proposal concerns the credits for hiring new workers or refraining from layoffs. Much of that money would likely go to companies that would have hired more people anyway, he said, adding that it is impossible to know what firms would have done without such a credit.

    Business lobbyists are pushing hard for Congress to allow companies that haven't paid corporate income taxes to get a break, too. Start-up companies, alternative-energy firms and large corporations that have been swallowing losses for years -- such as automotive and steel companies and some airlines -- have already begun lobbying for such "refundability."

    They argue that a provision to claim losses on back taxes will have little effect on the economy if firms that need it most -- struggling companies that weren't obligated to pay any taxes -- can't benefit from a tax break.

    Mr. Obama, however, doesn't back payments to companies that haven't paid taxes, aides said. Instead, businesses that haven't been paying taxes would be able to get payments from tax credits they would have taken in 2008 and 2009 for incentives offered by Congress, such as the production tax credit offered to renewable-energy firms. These amounts would likely be relatively small.

    "We're working with Congress to develop a tax-cut package based on a simple principle: What will have the biggest and most immediate impact on creating private-sector jobs and strengthening the middle class?" said transition-team spokeswoman Stephanie Cutter. "We're guided by what works, not by any ideology or special interests."

    As these details are being worked out, Mr. Obama and his family left Chicago during the weekend for Washington. He will be on Capitol Hill Monday, first to meet with House Speaker Nancy Pelosi (D., Calif.) and Senate Majority Leader Harry Reid (D., Nev.), then with the broader bipartisan leadership of Congress. The stimulus package will be front-and-center in those discussions.

    Democratic leaders and Obama aides acknowledge that congressional Democrats' initial goal of passing the recovery package before Mr. Obama's Jan. 20 inauguration is unrealistic. Now, they hope for passage before the Feb. 13 congressional recess.

    Republicans are already criticizing parts of the stimulus package. Sen. McConnell, speaking Sunday on ABC's "This Week," questioned one of the biggest items, which would send as much as $200 billion to states largely to expand the federal share of Medicaid, the health program for the poor. He suggested structuring that aid as a loan, saying it would encourage states to "spend it more wisely."

    An array of business tax cuts could help overcome such GOP opposition, enabling the Democrats to present their plan as a balanced mix of tax cuts and spending. It also would likely encourage business interests to lobby hard for its enactment.

    Mr. Obama's team has spoken of wanting to attract significant Republican support, not simply picking up votes from a Republican moderate or two.

    Obama aides have already enlisted business groups to rally behind spending for public-works projects. Norman R. Augustine, a former chairman and chief executive of Lockheed Martin Corp., will testify before the House Democrats' Steering and Policy Committee Wednesday in favor of an infusion of federal infrastructure spending. But the tax cuts may hold more sway with Republicans.

    —Amy Chozick contributed to this article.
    Write to Jonathan Weisman at jonathan.weisman@wsj.com and Naftali Bendavid at naftali.bendavid@wsj.com

    http://online.wsj.com/article/SB1231112 ... 08_mostpop
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  2. #2
    ELE
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    To get the economy back on track get the illegals out!

    The first thing the politicians need to do to put money back into our economy is to enforce our immigration laws, use attrition strategies and stop all "Anchor babies" benefits packages and also stop the "Anchors" from becoming US citizens. We will save at least 383.3 billion tax dollars.

    Until the polticians are willing to do that we know they are talking through there hats!
    Join our efforts to Secure America's Borders and End Illegal Immigration by Joining ALIPAC's E-Mail Alerts network (CLICK HERE)

  3. #3
    Senior Member LuvMyCountry's Avatar
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    The problem is he's going to give money to all the illegls and people who dont pay taxes. This is a huge redistribution of wealth scheme.

  4. #4
    Senior Member JohnDoe2's Avatar
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    Quote Originally Posted by LuvMyCountry
    The problem is he's going to give money to all the illegls and people who dont pay taxes. This is a huge redistribution of wealth scheme.
    He is cutting taxes. That means that the people who would have paid the taxes get to keep the money.
    The government won't take in the money so there won't be any money to give to illegals, or anyone else.
    But don't let the facts get in your way.
    NO AMNESTY

    Don't reward the criminal actions of millions of illegal aliens by giving them citizenship.


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  5. #5
    Senior Member misterbill's Avatar
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    johndoe

    "The largest piece of tax relief in the new plan would involve cuts for people who pay income taxes or who claim the earned-income credit, a refund designed to lessen the impact of payroll taxes on low- and moderate-income workers. "

    There are workers here illegally who do pay taxes. They will be rewarded by this plan. Their supporters have long cried the tale of woe that these people pay taxes and yet are "punished" for not being citizens. They also decry the fact that these "undocumented workers' are paying SS payments they cannot collect. My comment to that is twofold--First:"I should worry that someone who is here illegally is losing a few dollars out of his paycheck?" and
    Second: Pres Bush has reportedly already signed the following:

    The TREA Senior Citizens League, where TREA stands for The Retired Enlisted Association, numbers over 1.2 million legal American citizens who are retired from military and civilian careers (website). They are raising the alarm about the Totalization Agreement with Mexico on the U.S. Social Security Trust Fund.

    Currently awaiting signature by President Bush, the agreement would pay out billions in US social security benefits to millions of Mexican citizens who worked in this country ILLEGALLY. For three years TSCL has been asking the government for a copy of the agreement, AND HAS BEEN REFUSED! Yesterday, they brought suit in US District Court under the Freedom of Information Act.

    Current estimates suggest that Social Security lacks the funding to pay its current obligations to the Americans who have earned their pensions with a lifetime of blood, sweat, and tears. To incur additional massive unfunded obligation will hasten the bankruptcy of the system.

    What is worse, the US Social Security system is a vehicle for the redistribution of wealth. High wage earners get back disproportionately less than they pay in, and low wage earners get back more than they pay in. Since the illegal Mexican workers are typically at the very low end of the wage scale, the net effect is the transfer of wealth from hard-working United States citizens to illegal Mexican aliens. Moreover, the Mexicans will return to Mexico to retire, where the cost of living is cheap. There they would still receive benefits, under this plan. So the net effect is also to transfer the wealth created by the United States to the country of Mexico.

  6. #6
    Senior Member LuvMyCountry's Avatar
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    Quote Originally Posted by JohnDoe2
    Quote Originally Posted by LuvMyCountry
    The problem is he's going to give money to all the illegls and people who dont pay taxes. This is a huge redistribution of wealth scheme.
    He is cutting taxes. That means that the people who would have paid the taxes get to keep the money.
    The government won't take in the money so there won't be any money to give to illegals, or anyone else.
    But don't let the facts get in your way.
    If that were really true, you havnt seen the proposal yet, then why keep the Bush tax cuts in place and simply add to them? The reason he wont do that is because hes a marxist and they take from the productive and give too the unproductive. And those are the facts.

  7. #7
    Senior Member LuvMyCountry's Avatar
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    I am middle class and guarantee you my taxes are going up.

  8. #8
    Senior Member JohnDoe2's Avatar
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    Monkeys for Sale

    Once upon a time a man appeared in a village and
    announced to the villagers that he would buy monkeys for $10 each.

    The villagers, seeing that there were many monkeys around, went out to the forest and started catching them.

    The man bought thousands at $10 and, as supply started to diminish, the
    villagers stopped their effort. He next announced that he would now buy
    monkeys at $20 each. This renewed the efforts of the villagers and they
    started catching monkeys again.

    Soon the supply diminished even further and people started going back to
    their farms. The offer increased to $25 each and the supply of monkeys
    became so scarce it was an effort to even find a monkey, let alone catch
    it!

    The man now announced that he would buy monkeys at $50 each!

    However, since he had to go to the city on some business, his assistant would buy on his behalf. In the absence of the man, the assistant told the
    villagers: "Look at all these monkeys in the big cage that the man has
    already collected. I will sell them to you at $35 and when the man returns
    from the city, you can sell them to him for $50 each."

    The villagers rounded up all their savings and bought all the monkeys for
    700 billion dollars.

    They never saw the man or his assistant again, only lots and lots of monkeys!

    Now you have a better understanding of how the

    WALL STREET BAILOUT PLAN WILL WORK !!!!
    NO AMNESTY

    Don't reward the criminal actions of millions of illegal aliens by giving them citizenship.


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