Obama To Cut 300 Bln USD In Taxes

U.S. President-Elect Barack Obama is planning to include some 300 billion USD in tax cuts in his plan to stimulate the U.S. economy, which he is planning to discuss with the House and the Senate, international media informed. According to the sources, the rescue plan would cost between 675 billion USD and 775 billion USD, while the overall sum of tax cuts would account for approximately 40% of the incentive package, that is, between 270 billion USD and 310 billion USD. Obama is hoping that the 300 billion USD tax cuts for taxpayers making less than 200,000 USD p.a., along with a one year tax exemption for companies that hire or re-hire a certain number of employees (this component of the plan has been evaluated at 40-50 billion USD) will help create or save approximately three million jobs by 2011. The plan is also trying to stimulate consumer demand by spending 140 billion USD on tax cuts of 500 USD per person or 1,000 USD per family. Unlike the previous rescue plan, based on tax returns, promoted by President George W. Bush, Obama"s plan would involve a change in the tax collection rules, so that employees would benefit from an immediate increase in their pay.

The Democrats seem quite confident in this approach and state that President Obama"s plan will be approved by Congress in early February, shortly after the new leader will have moved into the White House (20 January 2009). However, the Republicans are asking for a longer period for consultations and hearings before the vote. Obama was to meet with Congress leaders yesterday to finalize the last details of the rescue plan for the world"s largest economy.