Obama to Pitch Permanent Research Tax Credit - paid for by closing other corporate tax breaks

[jefferson_dem]

Obama to Pitch Permanent Research Tax Credit
By JACKIE CALMES

WASHINGTON — As part of his pre-election push to spur the slumping economy and his party, President Obama this week will ask Congress to increase and permanently extend a popular but costly tax credit for businesses’ research expenses, and to pay for it by closing other corporate tax breaks, according to administration officials.

Mr. Obama is planning to outline the $100 billion proposal on Wednesday in a speech in Cleveland on the economy. The White House chose the venue partly to draw a contrast with a recent economic address there by Representative John A. Boehner of Ohio, the House Republican leader who would probably become House speaker should his party win a majority in November.

Besides seeking a permanent research credit, Mr. Obama will call for expanding the simpler of two credit options available to businesses. He would increase that to 17 percent from 14 percent.

The research credit, which has existed in some form since 1981, has strong bipartisan and business support. Yet the prospects for Mr. Obama’s proposal are unclear. Congress returns from a break in mid-September but will be in session only a few weeks before leaving for midterm election campaigning. Also, Republicans do not want to give Democrats boasting rights to legislative victories, even for a proposal like this one, which Republicans have long espoused.

And there is the issue of the credit’s cost. It has always been passed as a temporary credit because of the revenue losses; Congress has extended it 13 times for as little as six months, and the uncertainty has long vexed businesses. It lapsed after 2009, and a proposal to renew it for this year is pending in the Senate.

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http://www.nytimes.com/2010/09/05/us/politics/05tax.html?_r=1&src=twt&twt=nytimespolitics