While most political leaders agree that the wished for legislative package will not be ready for signing by President Obama on inauguration day, Senate Finance Committee Chairman Max Baucus still entertains the possibility of an early January markup, despite the transition team's failure to meet a December deadline for delivery of the Obama team's stimulus package principles to the House and Senate leadership. Nevertheless, while time passes, the total price tag quietly discussed among staffers seems to have topped out at $775 billion, with up to $136 billion for infrastructure construction projects by state and federal government agencies. One price which may be exacted in return for this increased spending is a "buy American" provision covering not only steel, which is already in the school construction provisions of HR 7110, but for all construction materials and equipment in all aspects of the infrastructure program. This will be sought by those Congressmen and Senators most vocal about the export of American manufacturing jobs.
The price of tax relief for middle class families and small businesses is generally thought to be about $300 billion, to be delivered to families by reducing withholding amounts for the first four months after the bill passes, and accelerated depreciation for business investments of up to 50% write off in the first year of capital investment. Small businesses will be permitted to expense capital purchases 100% up to $250,000.00 in the year of purchase. Additional benefits to businesses are expected to permit tax loss carry back for five years instead of the present limit of two years, effectively providing business tax refunds for losses suffered in 2008. And there may be tax incentives for businesses hiring new workers.
An additional $200 billion in increased health care subsidies to states is also contemplated.
Another indirect benefit to the construction industry will likely be included: repeal of the alternative minimum tax on municipal bonds issued for infrastructure construction.
With respected economists like San Francisco Federal Reserve President Janet Yellen and Chicago Federal Reserve President Charles Evans backing the need to "pull out all the stops" and provide "big stimulus," respectively, it seems pretty clear the question is not whether the legislation will pass, but only how soon.
The price of tax relief for middle class families and small businesses is generally thought to be about $300 billion, to be delivered to families by reducing withholding amounts for the first four months after the bill passes, and accelerated depreciation for business investments of up to 50% write off in the first year of capital investment. Small businesses will be permitted to expense capital purchases 100% up to $250,000.00 in the year of purchase. Additional benefits to businesses are expected to permit tax loss carry back for five years instead of the present limit of two years, effectively providing business tax refunds for losses suffered in 2008. And there may be tax incentives for businesses hiring new workers.
An additional $200 billion in increased health care subsidies to states is also contemplated.
Another indirect benefit to the construction industry will likely be included: repeal of the alternative minimum tax on municipal bonds issued for infrastructure construction.
With respected economists like San Francisco Federal Reserve President Janet Yellen and Chicago Federal Reserve President Charles Evans backing the need to "pull out all the stops" and provide "big stimulus," respectively, it seems pretty clear the question is not whether the legislation will pass, but only how soon.
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