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Obama to drop business tax break in stimulus bill

washington post

Bowing to widespread Democratic skepticism, President-elect Barack Obama will drop his bid to include a business tax break he once touted in the economic stimulus bill now taking shape on Capitol Hill, aides said Monday night.

Obama suggested the $3,000-per-job credit last week as one of five individual and business tax incentives aimed at winning Republican support.

He proposed $300 billion in tax relief in a bill that could reach $775 billion, and he resurrected the jobs-credit proposal from the campaign trail as one of his main provisions.

Republicans reacted favorably to the higher-than-expected ratio of tax breaks to spending for road projects, alternative energy production, healthcare technology and unemployment benefits.

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But they offered mixed reviews of his specific tax proposals and floated their own, including cuts in corporate and capital gains taxes.

Stronger opposition came from Democrats, who dismissed the $3,000 credit to employers for every job created or saved as ripe for abuse and difficult to administer. When no champion for the proposal came forward, the president-elect decided to sideline the incentive.

“We’ve always said we’re open to other ideas,” a senior Obama advisor said. “This was never set in stone.”


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