LAT: Obama to Propose New Incentives to Spur Employment

[flpoljunkie]

Obama to propose new incentives to spur employment

By Don Lee, Peter Nicholas and Jim Puzzanghera, Los Angeles Times
September 4, 2010

The president is expected to use a speech in Cleveland on Wednesday to outline a series of measures to kick-start the economy, which could include extending research and development tax credits for business, increasing spending on highways and other public works projects, and retaining the middle-class portion of the Bush administration tax cuts that are set to expire at the end of the year.

Many analysts believe that those measures will have only a modest effect, especially in the short time remaining before the midterm elections. But with Republicans lined up solidly against the Democratic administration on economic policy, more far-reaching proposals are considered out of the question.

"The key will be whether it's smart — getting bang for the buck — and if it's big enough," said Heidi Shierholz, an economist at the nonprofit Economic Policy Institute, a liberal-leaning research group in Washington. "And I'm concerned on both of those fronts."

One idea that has received some support from Republicans is a three-month payroll tax holiday for all workers and businesses.

That would amount to a 6.2% tax cut for each, freeing up money that employers could use for new hiring and workers could use to boost consumer spending.

But White House aides indicated that Obama will not embrace the idea. It would cost the government about $120 billion in revenue if adopted for two months — and a staggering $700 billion if continued for a full year.

Also, an unrestricted tax holiday would not be narrowly focused on Obama's goal of adding jobs.

"I think the notion of giving payroll tax holidays is not very well targeted," said Gary Burtless, an economist at the Brookings Institution think tank in Washington. "That's going to go to all kinds of firms, even those that are reducing their employees."

http://www.latimes.com/business/la-fi-jobs-20100904,0,5350685.story

[msongs]

1. "employers" will POCKET all the $$ from tax changes instead of adding jobs lol nt

[The Northerner]

2. I also wouldn't be surprised if they did so

[Onlooker]

3. It should be interesting ...

... the Democrats are going to propose initiatives that the Republicans won't really want to support in the hope of getting something worse after the elections. But, if they don't support what the Democrats propose, then it could affect their chances of getting elected. We're in for a chess endgame, but sadly it's as if the Democrats have spotted the republicans a bishop.