Sunday, January 04, 2009
If you read my Insta-lanched "politically impossible TigerHawk plan for fixing the economy," you no doubt raised an eyebrow at my proposal to bring back accelerated depreciation for qualifying capital investment. Well, the WSJ reports that Barack Obama may propose just that:
A second provision would entice firms to plow that money back into new investment. The investment write-offs would be retroactive to expenditures made as of Jan. 1, 2009, to ensure that companies don't sit on their money until after Congress passes the measure.
Of course, if cap ex is the goal, he should also enact the second part of my proposal, the full deductability of passive losses against ordinary income on the personal income tax. We know that tax shelters will eventually result in too much investment, but that means we also know that they stimulate investment like nothing else. When you are starting from less than zero, you really need to think about unleashing the most powerful gun in your tax policy arsenal.
On the other hand, for a reasonably decent critique of tax policy as a device to stimulate, read this.
MarkJ beat me to it, but its begining to look like the Democrats voted someone into office, that appears to be to the right of Bush and McCain on a bunch of issues. Granted is term hasn't even started yet, but I am starting to believe he's not the second coming of Carter.
The question is not what real components will be put into his giant tax hike and spending bill...err... I mean Stimulus Package. But what tiny little insignificant section of it that he will trumpet loudly and spend all his time describing and promoting.
99.5% of this bill will *never* be looked at or discussed in public, but there will be a great focus on some little "Thing Which Has Not Been Done Before And Will Save Us." which will be given a cute name and a little description paragraph in USA Today. And I don't think it will be accelerated depreciation.