05 January 2009 17:57 [Source: ICIS news]
WASHINGTON (ICIS news)--US business leaders on Monday welcomed plans by the incoming Obama administration to cut taxes as part of a $700bn (€504bn) economic stimulus package that Congress is expected to pass by mid-February.
Obama is said to want tax cuts to make up 40% of whatever stimulus package Congress approves in the month following Obama’s inauguration on 20 January as the nation’s 44th chief executive.
“The tax cuts are large enough to make a difference and will benefit in individuals and businesses, both of which are hurting,” the chamber said.
The US Chamber of Commerce is a private trade group whose three million corporate members include many chemical and plastics producers.
“While the devil is in the details, we are encouraged by this latest development,” said Bruce Josten, the chamber’s executive vice president for government affairs, referring to the reported tax cuts.
“Significant tax relief will spur consumer spending, business investment and help jumpstart the economy,” Josten said in a statement.
The larger part of a stimulus bill - which sources say could total $1,000bn by the time it emerges from Congress - would be federal spending on infrastructure improvements, increased unemployment benefits and tax rebates or loans to struggling state governments.
Obama also has dropped plans to seek early repeal of the personal income tax cuts put in place by President George Bush. Those tax cuts are due to expire at the end of 2010, but Obama and many Democrats in Congress had earlier vowed to repeal those tax reductions this year.
Josten urged the Obama administration and Congress to consider even further tax reductions to aid the economy.
He said the federal government should provide investment tax credits for home buyers, tax cuts on repatriation of foreign earnings to help companies refinance debt and a temporary suspension of income tax on debt cancellation.
Although Obama had earlier expressed hope that a new stimulus bill would be crafted quickly so that he could sign it into law after he is sworn into office on 20 January, leaders in Congress said a final bill is not likely before mid-February at the earliest.
The president-elect arrived in Washington on Sunday and is to meet on Monday with Democrat and Republican leaders in Congress to discuss broad terms of a stimulus package.
($1 = €0.72)
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