President Obama is proposing some new tax breaks he hopes will encourage businesses to expand and get the economy moving again. The President is set to unveil the tax breaks along with a plan for $50 billion worth of infrastructure investment in a speech about the economy on Wednesday, but some details about the tax breaks are already being reported.
One proposed tax break that's receiving a lot of attention, would allow business to write off 100 percent of new capital investments, money spent on plants and equipment, through 2011. Companies can already deduct these expenses, but currently they have to wait longer to do so. Allowing businesses to take the deduction upfront, will mean they have more cash on hand to spend or invest. Economists at the White House estimate that the plan would cut business taxes by around $200 billion over two years.
The President is also going to propose increasing and making permanent tax credits for research and development. The research tax credit is typically extended by Congress year after year, but some gaps have left business groups frustrated.