Various reactions to the sudden flurry of proposals from the White House on taxes and infrastructure.
Wall Street Journal, “Obama to Push Tax Breaks”:
Jay Timmons, executive vice president of the National Association of Manufacturers, described the expensing proposal as “good at face value.”
But he questioned the administration’s logic in proposing to raise some business taxes in order to lower others.
Larry Kudlow, National Review, The Corner, “Obama Gets Write-Offs Right“:
It’s all midterm-election politics, but Obama’s last-minute idea for 100 percent tax write-offs for corporate investment is, in fact, a good idea.
He proposes a two-year window to incentivize businesses to bring forward their investments. From the standpoint of investment, it’s the right way to go. Perhaps Larry Summers now thinks tax cuts are the right way to go, too.
CEOs like Fred Smith of FedEx have argued for full cash expensing for many years, along with a big drop in the corporate tax rate itself. This is what Team Obama should have done in the first place: Slash business tax rates and accelerate investment-depreciation schedules.
Conn Carroll, The Heritage Foundation, “Morning Bell: The Obama Tax and Spend Hikes“:
[Spending] is just one side of President Obama’s economic prescription for the country. Not only is he advocating another $50 billion in spending on top of the $814 billion in economic stimulus spending he has wasted so far, he is also advocating for a $921 billion tax hike set to take effect this January 1, 2011. The administration wants us to believe that this massive tax hike will have no effect on our economic recovery. But that is just not so. Raising taxes on work and investment would mean less work and less investment and can be regarded only as an overtly hostile anti-jobs policy. That is just one of the myths exposed by Heritage analyst JD Fosters’ new paper: Obama Tax Hikes Defended by Myths and Straw Man Arguments.
Byron York, The Examiner, “Obama’s ‘pivot’ to the economy comes far too late“:
On his 595th day in office, less than eight weeks before voters go to the polls, Obama is making that now-infamous pivot. In a flurry this week, he’s proposing spending $50 billion on the nation’s roads and railways. He’s proposing a $100 billion research tax credit for businesses. He’ll have more proposals in the days ahead.
White House officials insist these are serious policy initiatives that are not being put forth just so Obama can say he’s doing something about the economy. But that leads to the question: If these are such great ideas, why wasn’t the president pushing them earlier?
Yes. The long-term authorization of federal highway, highway safety, motor carrier safety, and public transportation programs, the “Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users” (SAFETEA-LU), expired on September 30, 2009.
The Research and Development Tax Credit expired Dec. 31, 2009.