President Obama described a series of proposals aimed at encouraging companies to add more jobs, including tax cuts for small businesses.
The proposals on Tuesday came on the heels of the White Houses jobs summit last week, in which Obama heard from business and labor leaders about ideas to encourage job growth (see White House Mulls Tax Credits for Jobs). Last Friday, the Labor Department released an encouraging report showing the unemployment rate dipping from 10.2 to 10.0 percent, even though 11,000 nonfarm jobs were lost. However, the Obama administration is still facing pressure to create more of the jobs promised by the stimulus package the president signed in February.
Among his proposals is a new employment tax cut for small businesses to encourage more hiring next year. The White House said it would work with Congress to design a provision to provide a short-term tax incentive for this purpose.
To encourage investment by small businesses and improve their access to capital, the administration is also calling for a one-year elimination of the tax on capital gains from new investments in small business stock. The Recovery Act allowed a 75 percent exclusion from capital gains taxes on small business investments.
There is only so much government can do, said Obama. Job creation will ultimately depend on the real job creators: businesses across America. But government can help lay the groundwork on which the private sector can better generate jobs, growth and innovation.
The administration is also calling for the extension through 2010 of the Recovery Act provision that allows small businesses to immediately expense up to $250,000 of qualified investment.
To give businesses an incentive to invest, the administration is calling for extending the Recovery Act provision that accelerates the rate at which business can deduct the cost of capital expenditures. This provision will put more than $20 billion in the hands of businesses in 2010, while enabling Treasury to recoup much of the funding as business regain their strength.
Obama called for the elimination of fees and an increase in guarantees for loans through the Small Business Administration, a measure that extends provisions in the Recovery Act through the end of 2010. In addition, the President called for continued Treasury efforts to use the Troubled Asset Relief Program to support small business lending.
Obama also wants to make additional investments in roads, bridges, highways, transit, rail, aviation and other infrastructure to encourage job growth. More infrastructure investment projects would be selected on the basis of merit, through a combination of grants and loans.
The president called on Congress to consider a new program to provide rebates for consumers who retrofit their homes for greater energy efficiency. He also wants to expand several oversubscribed Recovery Act programs that have leveraged private investment in energy efficiency to create clean energy manufacturing jobs. Those include industrial energy efficiency investments and tax incentives for investing in renewable manufacturing facilities in the U.S.
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