Obama pushes tax plan to help economy, job creation

The Obama administration is looking to use the revenue from expiring tax cuts for upper-income taxpayers to finance about $35 billion of tax cuts for small businesses and lower-income workers, according to The Wall Street Journal.

Democrats have various opinions regarding what is needed to create jobs and grow the economy. A small group wants to extend temporarily all the tax cuts passed by George W. Bush, which expire Jan. 1. Some want to let tax cuts for those earning $250,000 or more expire and use the proceeds for a payroll-tax holiday or other small-business breaks. Others want to end the top-tier cuts and use the revenue to pay down the deficit.

Democrats face the challenge of selling a tax plan to Republicans just weeks before a midterm election that could lead to major gains for the GOP in Congress.

The White House is ready to redirect the Bush tax cuts, saying most of the tax increases would hit households with incomes exceeding $1 million.

Sen. Russ Feingold (D-Wis.) is urging Congress to extend and expand a payroll tax cut for small firms hiring new workers, and the White House is considering that proposal, as well as a proposal to extend the payroll tax cut to those who are hired. Additionally, it wants to extend the research-and-development tax credit.

Some are urging broader small-business tax cuts that reportedly might have bipartisan appeal, such as Rep. Joe Wilson's (R-S.C.) proposal of an immediate, 20 percent small-business tax cut.

Congress already approved a tax incentive that exempts wages paid to new hires who had been out of work 60 days or more from an employer’s 6.2 percent share of Social Security payroll taxes.

Date : 9/9/2010