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Stop giving tax breaks to companies: Obama

The US President said the economy is not growing enough to reduce the high unemployment rate and called for closing loopholes in tax codes.

twitter-logo PTI   Washington     Last Updated: September 15, 2010  | 16:00 IST

Noting that the US' economy is not growing enough to reduce the high unemployment rate, President Barack Obama has called for closing those loopholes in the current tax codes that gives tax breaks to companies which create jobs overseas.

"The economy is growing, but it's not growing as fast as we would like. So over the last week, I've put forward a few more things that I think can really make a difference," Obama said in his remarks in a local neighbourhood discussion on the economy in Fairfax, Virginia.

"Number one, instead of giving tax breaks to companies that are investing overseas, which our tax code does right now, what I've said is let's close those tax loopholes and let's provide tax breaks to companies that are investing in research and development here in the US," Obama said, it is a smart thing to do.

"We want to incentivise businesses who actually are making profits right now to say, we should go ahead and take a chance, and lets invest in that next new thing," he said in his speech.

Obama said that he has also proposed to allow companies to write off essentially their new investments early if they make those investments here in 2011, so essentially accelerating the depreciation that they can take on their taxes to encourage them to frontload making investments now.

"The third thing that we've proposed -- and this is actually pending right now in the Senate ... is a small business package that would eliminate capital gains taxes for small businesses, would help small businesses obtain loans," he said.

"It is a common-sense bill that traditionally would have garnered a lot of bipartisan support, but we're in the political silly season right now so it's been blocked up by the Senate Republicans for the last month and a half, two months," Obama said.

Noting that small businesses are still having trouble getting loans, the President said: "What we want to do, even though we've already given them eight different tax breaks, is we want to say we're going to give you just a little bit more incentive, because if we can get small businesses growing and investing and opening their doors and hiring new workers, that's probably going to be the area where we can make the most progress over the next year in terms of accelerating employees and reducing the unemployment rate."

"So these are all steps that we're taking right now to try to move the economy forward. Now, I have never been more confident about the future of our economy, if we stay on track and we deal with some of these longstanding problems that we hadn't dealt with for decades," he said.

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