The Wall Street Journal reports:
President-elect Barack Obama and congressional Democrats are crafting a plan to offer as much as $310 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, and may make it easier to win over Republicans who have stressed that any initiative should rely relatively heavily on tax cuts rather than spending.
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’s in 2003 — contained $231 billion in 2004 and 2005.
And we’re not just talking tax credits for lower wage earners and non-income tax payers:
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. In effect, this would entitle companies to receive cash from the government that they otherwise couldn’t have claimed.
A second provision would entice firms to plow that money back into new investment. The investment 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.
A separate element would offer a one-year tax credit for companies that make new hires or reverse 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 million in 2009 and 2010. Currently, the limit is $175 million.
So let’s get this straight: Robert Gates will be the Defense Secretary, we’re ramping up U.S. forces in Afghanistan and providing a reasonable period of time for a hand-off in Iraq, there isn’t going to be a windfall oil profits tax or income tax hike but there is going to be a huge set of business tax cuts – and Rick Warren is giving the invocation at the Inauguration. Who won in November?
I’m sure there will be times during the next four years when the Obama administration’s decisions on issues (e.g. judicial appointments) have conservatives banging their heads against the wall, bemoaning the fact that John McCain wasn’t elected. But so far it’s hard to imagine McCain would have been doing more than the incoming Obama team seems to be proposing — and with as much chance of success –to further some key center-Right policy aims.