Seidle writes the following:
The first proposal would allow businesses “to deduct from their taxes through 2011 the full value of new equipment purchase, from computers to utility generators, to increase demand for goods and create jobs.” (New York Times) The initial cost of the program would be around $200 billion in uncollected revenue. Sound familiar? The administration doesn’t seem to have learned from its previous stimulus splurge, and now wants to dress it up and sell it as something else. Sure, I’m all for tax breaks — but this smells fishy.I find it funny that he makes the argument that a tax write-off is essentially a "stimulus" - I thought the right-wing was all for tax write-offs, but because the right-wing can't be happy with anything this administration does, they try to lessen the importance of such a proposal by trying to equate it with the somewhat unpopular stimulus bills that doled out money to various projects around the nation. He writes in his post that the federal government would initially result in the loss of $200 billion in revenue (which businesses would be able to use to reinvest in their companies - that seems pretty small-business friendly if you ask me.
But the second proposal to come out of the administration this week might just make some sense. The president is looking to make permanent tax credits for firms’ research and development. Instead of giving companies an allowance of sorts, the administration wants to reward businesses for innovating. That seems to be the right way to go — and it sounds a little (gasp!) capitalistic (albeit with some government help).
The purpose of the write-off is to encourage businesses to upgrade, modernize, or expand their operations - Seidl mocks the idea of computer purchases creating jobs but he fails to acknowledge the fact that America has a pretty decent computer manufacturing. According to the Bureau of Labor Statistics, "professional and related workers account for 1 out of 3 workers" and the industry is set to see a 19 percent decline over the next 8 years. The effects of this legislation can have some combined long-term and short-term effects.
I also found Seidl's second point to be interesting, because he actually had something positive to say about it, although he becomes a bit condescending at the end calling the tax credit "government help." If you use Seidl's logic, every time the government doesn't collect a tax, we move closer to socialism - that must make Republicans the biggest socialists out there!
With these guys, we're damned if we do and damned if we don't...
Anyone but a conservative should be able to see that this is actually a tax cut for businesses.ReplyDelete