Obama unveils $450 billion spending and tax-cut plan to revive US economy
09 Sep 2011
American President Barack Obama, battling the prospects of a double-dip recession and rising unemployment, on Friday unveiled an ambitious nearly $450 billion jobs plan that includes spending on infrastructure and tax cuts for workers and small businesses.
Addressing a joint session of Congress, Obama appealed to Republican opponents to help him get the bill passed. ''I know some of you have sworn oaths to never raise any taxes on anyone for as long as you live,'' he said. ''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.''
At the heart of Obama's new plan is a cut in payroll taxes, covering the first $106,800 in earnings, and evenly split between employers and employees. Obama wants the tax paid by employees to be cut from next year to 3.1 per cent from 6.2 per cent at present. Last year, following a deal, set to expire on December 31, the rate had been slashed by two per cent.
Businesses would also get a 3.1 per cent reduction in taxes they pay on the first $5 million of their payroll, which would help smaller firms. The 6.2 per cent that employers pay as tax would be waived on the first $50 million net increase in its payroll.
Similarly, Obama has proposed additional tax credits for hiring veterans and workers who have been unemployed for more than six months.
The package also includes spending about $105 billion on schools modernisation, transportation and rehabilitation of vacant properties.
