- The Washington Times - Tuesday, November 11, 2008



If Congress is intent on passing another stimulus package to spur growth in the economy, the plan should weigh heavily toward creating jobs. Such a proposal means cutting taxes for small businesses, which employed the majority of the more than 1.2 million Americans who lost their jobs this year. The Republicans are working on such a proposal.

Democrats have reams of ideas for spending billions of dollars on infrastructure projects, such as roads and schools. This is neither a short- nor long-term solution - and it could prove unfeasible. Many projects that call for building new roads, bridges and schools require states to provide matching funds. The 29 states that are currently facing deficits don’t have the money. Yet President-elect Barack Obama suggests that the stimulus “provide the kinds of assistance to state and local governments to make sure that they don’t compound some of the problems that are already out there by having to initiate major layoffs or initiate tax increases.” But doling out money to the states to encourage them to spend is not helpful to the economy, and there are no assurances that the slow, bureaucracy-driven approach will provide the quick jolt Democrats are promising. Helping small businesses and providing them with capital is what is needed.

Republicans have been working on a recovery plan since October. It proposes eliminating capital-gains taxes for two years to encourage investment and possibly allow small and large investors to use the new capital to pay off debts, providing more liquidity to the banks and credit market. It also proposes tax incentives for small businesses. The plan would raise limits that allow small businesses to invest in new equipment and it grants a “bonus depreciation” to increase the equipment’s value so that 75 percent of the cost could be deducted in the first year. The plan also would decrease the corporate tax rate from 35 percent to 25 percent.

Small businesses are the engine of the economy, providing the vast majority of jobs in this country. It is only logical that helping them grow helps people get back to work, which is what Democrats say is the goal of their stimulus plan.

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