Obama's new plan to give biz tax break
President Barack Obama gives a speech at a rally in Milwaukee, Wis.
TEXT OF INTERVIEW
JEREMY HOBSON: Another day, another economic stimulus idea from the White House. The latest plan: to speed up a tax break for companies to build new factories and buy equipment like computers and tractors. Marketplace's Scott Tong is live for us in Washington this morning with more. Good morning, Scott.
SCOTT TONG: Jeremy, good morning.
HOBSON: Well, we heard about a big plan for infrastructure spending yesterday. What are the details of the latest proposal?
TONG: Well, when a company buys new stuff, typically it can write off those costs over several years -- sometimes even 20 years -- depending on what the stuff is. This proposal says you can take the whole deduction upfront. So this is a cash flow thing, money in their pockets now instead of later, if they spend it on plants and equipment, the things that Uncle Sam wants. Now the administration says this is going to give businesses $200 billion that they'd otherwise be paying in taxes. So if you're for it, you argue that this creates jobs and contracts for the people who make stuff, like bulldozers and computers. If you're against it, you argue this may not change much. Companies already have access to cheap credit to invest and they may not do it unless sales actually pick up, Jeremy.
HOBSON: So good arguments for and against. Can this get through Congress, though, Scott?
TONG: Well, key business lobbying groups have given initial "it smells good" kind of sense. But... And the "but" is what they really want something else: to extend the income tax cuts on wealthier Americans that expire soon. So everyone is posturing and we can expect that throughout the fall campaign. Tomorrow the president speaks again about the economy in Cleveland.
HOBSON: OK. Marketplace's Scott Tong in Washington. Thanks, Scott.
TONG: You're welcome.