Seeking ways to spur economic growth ahead of the November elections, President Barack Obama will ask Congress to increase and permanently extend research and development tax credits for businesses, a White House official said on Sunday.
Obama will outline the USD 100 billion proposal during a speech on the economy Wednesday in Cleveland, the official said. The announcement is expected to be the first in a series of new measures Obama will propose this fall as the administration looks to jump-start an economy that the president himself has said isn't growing fast enough.
In addition to making the research credits permanent, Obama will also ask Congress to extend one of the credit options available to businesses from 14 to 17 per cent, according to the official, who spoke on the condition of anonymity because the proposal has not been formally announced.
Obama has proposed making the research and development tax credit permanent before, as part of the budget he submitted to Congress earlier this year.
"That's where US competitiveness lies in high-technology industries," Laura Tyson, a member of Obama's Economic Recovery Advisory Board, said today on "Face the Nation" on CBS.
"I don't think this is something that has ... as immediate a job impact as, say, movement on the current tax credits for the unemployed or extending a payroll tax holiday of some sort. But I think it's very important in terms of job creation over the longer term," Tyson said.
While the idea is popular in Congress, coming up with offsetting tax increases or spending cuts has been a stumbling block. Obama will ask lawmakers to close corporate tax breaks for multinational corporations and oil and gas companies.