Obama’s proposed economic stimulus recovery plan includes a $500 a year tax cut for most single workers and a $1000 tax break for married couples. But this particular provision is coming under heavy fire from both sides of the Congressional aisle.
According to an article in CNN, Congressman Kent Conrad complained that the tax cut was costly and did little to offer financial relief to the average American family.
“Twenty bucks a week. How much of a lift is that going to give?” said Congressman Conrad.
Although I agree that the tax cut is small, it can go a long way for families who are struggling just to meet the every day needs of their families. That $500 – $1000 a year can add up to a debt being repaid or be just enough to help desperate families avoid foreclosure .
Congressman Conrad also criticized the tax credit for businesses who hire new employees.
“If I’m a business person, it’s unlikely if you give me a several thousand dollar credit that I’m going to hire people if I can’t sell the products they’re producing,” Conrad said.
I’m forced to agree with him on this point. Many businesses are barely avoiding bankruptcy and are laying off more workers, not hiring. They’re simply not enough customers to buy all of the products being created by businesses struggling to avoid bankruptcy.
These companies on the edge of bankruptcy are currently trying to scale back from a level of production that was developed during the boom. I’m not sure that this $3000 tax incentive for businesses is going to do the trick to create new jobs in this economy.