Obama Calls for $100 Billion Tax to Encourage Hiring

September 4th, 2010 Brock Hailes Leave a comment Go to comments

On Wednesday, Sept. 8, President Barack Obama plans to urge Congress to permanently extend and expand a business research and development tax credit. He states this tax credit could help spur economic growth but would cost about $100 billion over the next decade.

Specifics of the Tax Credit

The research tax credit is provided to companies as a way to reward them for developing new technologies within the United States so jobs can be preserved in America instead of being sent abroad. This credit has been in existence for a while but expires from time to time, which is why the president is looking for a way to extend it permanently.

Obama is not the first president to back a long-term extension of this credit. In fact, Clinton and Bush both favored the credit but were always shot down by Congress due to the high cost involved. Obama’s hope on Wednesday is to convince lawmakers that making the credit a permanent fixture will help to jump start the economy and get workers the jobs they need.

Will It Immediately Affect Job Growth?

On a recent broadcast of CBS’s “Face the Nation,” Laura Tyson, an economics professor at the University of California at Berkeley, said the research credit wouldn’t have an immediate impact on jobs, like tax credits for the unemployed or extending payroll tax holidays would.

However, she did state the research credit is and has always been “very important in terms of job creation over the longer term.”

So far, Republicans are in opposition to the permanent extension, insisting this tax credit looks more like another stimulus package. Obama will set out to explain the differences between the two and prove that taking this route will be one of the many investments necessary to ensure the economy gets moving again.

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