* To encourage investment by small businesses and improve their access to capital, the Administration is 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% exclusion from capital gains taxes on small business investments.
* Extension of enhanced expensing provisions for small businesses: 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.
* Extension of Recovery Act bonus depreciation tax incentive: 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.
* A new tax cut for small businesses to encourage hiring in 2010. Although the economy is now growing again, many businesses remain reluctant to hire. In this economic environment, an employment tax cut for small businesses has the potential to accelerate the pace of hiring. The Administration believes it is important to provide a short-term tax incentive to encourage small business hiring and support employment, and will work with Congress to design a provision that accomplishes these goals.
* Eliminating fees and increasing guarantees for small businesses that borrow through major SBA programs in 2010. The President 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 TARP to support small business lending.
1.) This is a stupid idea unless the tax cut extension lasts for longer than 1 year. 1 year is enough time to invest and start the business. It is hardly enough time actually grow the business to meaningful levels such that selling stock is a good idea.
2.) Anything that allows for increased investment is a good idea.
3.) Extension of depreciation deductions is a standard way to encourage investment. However, I would add the removal of the deduction calculation from the alternative minimum income computation. That would encourage high net-worth individuals to put money into small business.
4.) Credits or tax incentives fir hiring is a good idea as well. The bottom line is businesses are worried about hiring right now. Anything that gets them off the fence is helpful.
5.) This should increase the flow of credit to small businesses -- another good idea.
* Additional investment in highways, transit, rail, aviation and water. The President is calling for new investments in a wide range of infrastructure, designed to get out the door as quickly as possible while continuing a sustained effort at creating jobs and improving America’s productivity.
* Support for merit-based infrastructure investment that leverages federal dollars. The Administration supports financing infrastructure investments in new ways, allowing projects to be selected on merit and leveraging money with a combination of grants and loans as was done through the Recovery Act’s TIGER program.
6.) Infrastructure is perhaps one of the best things to invest it, largely because of the high multiplier effect and fact that the multiplier lasts a long time. The multiplier effect tells you how much national income each dollar of spending gets you. Infrastructure has a high multiplier. And the multiplier lasts a long time. For example, build a road between two cities that had no transportation between them and you will increase business between them for a long time (as in decades). Eisenhauer built the national highways which forever increased the US' productive capabilities.
7.) I need to see more details to make a call on this one.
* New incentives for consumers who invest in energy efficient retrofits in their homes. Smart, targeted investments in energy efficiency can help create jobs while improving our energy security and saving consumers money. The President today called on Congress to consider a new program to provide rebates for consumers who make energy efficiency retrofits. Such a program will harness the power of the private sector to help drive consumers to make cost-saving investments in their homes.
* Expansion of successful oversubscribed Recovery Act programs to leverage private investment in energy efficiency and create clean energy manufacturing jobs. The Recovery Act included historic investments that have helped to build the foundation for a clean energy economy. The Administration supports expanding programs for which additional federal dollars will leverage private investment and create jobs quickly, such as industrial energy efficiency investments and tax incentives for investing in renewable manufacturing facilities in the U.S.
8.) Cash for caulkers: good idea for two reasons. First, it lowers peoples utility bills -- always a good thing. Secondly, it puts construction employees back to work. This part of the work force has been hit really hard because of the housing crisis. Bottom line -- thumbs up.
9.) Why we are not investing billions of dollars in clean energy is completely beyond me. He who creates cheap, clean energy will have customers for generations.
