President Obama addressed a joint session of Congress this evening, proposing a $447 billion jobs package titled the American Jobs Act. The plan includes a number of taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. changes. Below are the President’s references to taxes in his speech:
[The American Jobs Act] will provide a tax break for companies who hire new workers, and it will cut payroll taxA payroll tax is a tax paid on the wages and salaries of employees to finance social insurance programs like Social Security, Medicare, and unemployment insurance. Payroll taxes are social insurance taxes that comprise 24.8 percent of combined federal, state, and local government revenue, the second largest source of that combined tax revenue. es in half for every working American and every small business.[…]
Pass this jobs bill, and starting tomorrow, small businesses will get a tax cut if they hire new workers or if they raise workers’ wages. Pass this jobs bill, and all small-business owners will also see their payroll taxes cut in half next year. If you have 50 employees making an average salary, that’s an $80,000 tax cut. And all businesses will be able to continue writing off the investments they make in 2012. It’s not just Democrats who have supported this kind of proposal. Fifty House Republicans have proposed the same payroll tax cut that’s in this plan. You should pass it right away.[…]
Pass this jobs bill, and companies will get extra tax creditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly. s if they hire America’s veterans. We ask these men and women to leave their careers, leave their families, risk their lives to fight for our country. The last thing they should have to do is fight for a job when they come home.[…]
Pass this jobs bill, and companies will get a $4,000 tax credit if they hire anyone who has spent more than six months looking for a job.[…]
Pass this jobs bill, and the typical working family will get a $1,500 tax cut next year, $1,500 that would have been taken out of your pocket will go into your pocket. This expands on the tax cut that Democrats and Republicans already passed for this year. If we allow that tax cut to expire, if we refuse to act, middle- class families will get hit with a tax increase at the worst possible time. We can’t let that happen. I know that some of you have sworn oaths to never raise any taxes on anyone for as long as you live. Now is not the time to carve out an exception and raise middle-class taxes, which is why you should pass this bill right away.
This is the American Jobs Act. It will lead to new jobs for construction workers, for teachers, for veterans, for first responders, young people, and the long-term unemployed. It will provide tax credits to companies that hire new workers, tax relief to small-business owners, and tax cuts for the middle-class.[…]
[A] week from Monday, I’ll be releasing a more ambitious deficit plan, a plan that will not only cover the cost of this jobs bill, but stabilize our debt in the long run. This approach is basically the one I’ve been advocating for months. In addition to the trillion dollars of spending cuts I’ve already signed into law, it’s a balanced plan that would reduce the deficit by making additional spending cuts, by making modest adjustments to health care programs like Medicare and Medicaid, and by reforming our tax code in a way that asks the wealthiest Americans and biggest corporations to pay their fair share.[…]
I’m also well aware that there are many Republicans who don’t believe we should raise taxes on those who are most fortunate and can best afford it. But here’s what every American knows: While most people in this country struggle to make ends meet, a few of the most affluent citizens and most profitable corporations enjoy tax breaks and loopholes that nobody else gets.
Right now, Warren Buffett pays a lower tax rate than his secretary, an outrage he has asked us to fix. We need a tax code where everyone gets a fair shake and where everybody pays their fair share. And, by the way, I believe the vast majority of wealthy Americans and CEOs are willing to do just that, if it helps the economy grow and gets our fiscal house in order.
I’ll also offer ideas to reform a corporate tax code that stands as a monument to special interest influence in Washington. By eliminating pages of loopholes and deductions, we can lower one of the highest corporate tax rates in the world. Our tax code should not give an advantage to companies that can afford the best-connected lobbyists. It should give an advantage to companies that invest and create jobs right here in the United States of America.
So we can reduce this deficit, pay down our debt, and pay for this jobs plan in the process. But in order to do this, we have to decide what our priorities are. We have to ask ourselves, “What’s the best way to grow the economy and create jobs?”
Should we keep tax loopholes for oil companies, or should we use that money to give small-business owners a tax credit when they hire new workers? Because we can’t afford to do both.
Should we keep tax breaks for millionaires and billionaires, or should we put teachers back to work so our kids can graduate ready for college and good jobs? Right now, we can’t afford to do both.
This isn’t political grandstanding. This isn’t class warfare. [Laughter.] This is simple math. These are real choices. These are real choices that we’ve got to make. And I’m pretty sure I know what most Americans would choose. It’s not even close. And it’s time for us to do what’s right for our future.[…]
Look for more information and analysis of the President’s specific proposals on Friday and next week. Politico reports the following breakdown in costs:
- $240 billion – expansion and extension of one-year payroll tax cut
- $62 billion – unemployment insurance and jobs programs
- $60 billion – infrastructure projects
- $35 billion – teachers, police, firefighters
- $30 billion – school construction
- $15 billion – vacant and foreclosed building rehabilitation
- $447 billion – total