Obama’s $300 Billion Tax Break for Business: A Political Move for November?

Unemployment and underemployment are perhaps the main reasons why a recession is very destructive to an economy. Without jobs or any source of living, people will not have enough money to spend for basic commodities and other luxurious things. Consumer spending will be very much limited and thus will reduce the profit of other businesses as well. This domino effect is proven to be the real hindrance for economic growth. The less money that revolves in the market, the more stagnant an economy is and the more it is prone to a double dip recession.

The U.S. economy has been one of the world economies most hit by the recession. Recent figures show that the unemployment rate has now stood at 9.6%. This figure is projected to rise as more federal workers and business employees are getting axed as the days passed by. Over 8 million jobs have already been lost and the Obama administration still hasn’t done anything significant enough to address this issue. In fact, large businesses are strongly protesting on the impending expiration of tax breaks which they say might add up to more job losses.

Pres. Obama and his administration previously passed the stimulus bill which granted over $800 billion to business firms and government institutions. The aim was to promote spending in order to generate jobs and stimulate economic growth. But many people believed that the stimulus bill was a failure resulting in the sudden dip of Obama’s trust and confidence rating. With intense pressure coming from American citizens and other lawmakers along with the upcoming November midterm elections, the Obama administration is strongly considering everything it can do to help save the economy and bring back the trust needed for his democratic party.

This Wednesday, President Barack Obama is set to propose $300 billion for tax breaks which will be given to various businesses. $200 billion will be for tax cuts while $100 billion will be allocated for expanding and making permanent a tax credit for research and development. He believes that if businesses will be able to reduce their costs, they will eventually start hiring people again and provide more jobs to the industry. This measure is expected to provide tax incentives to businesses who will be investing rapidly to the U.S. economy.

This measure comes along with another $50 billion aid for infrastructure development. It is interesting to note that because voter’s worries about the economy, the Democrats are strongly facing the possibility of incurring heavy losses on the upcoming November elections. The president is doing whatever he can to save the economy and provide a positive feedback for his democratic party on the upcoming elections. Besides, the control for Congress is at stake.