Confused about obamas plan.

Discussion in 'Economics' started by noob_trad3r, Sep 7, 2010.

  1. HE wants to give a 100% tax credit on capital expenditures. But if a company has 15% Idle capital equipment and not enough demand to put it in use, why would they spend money adding more capacity just for the sake of a tax credit which really amounts to nothing when you end up factoring deprecation that you cannot discount later?

    No company is gonna want to risk cash now when no one knows whats coming.

    So how is this going to help? And 90% of capital equipment is made overseas anyhow. So at best it will just stimulate Taiwanese/chinese etc economies.

    Not US economy.
  2. Not going to dispute the rest, but that capital goods assertion is nonsense:

    CIA World Factbook US


    $1.046 trillion (2009 est.)
    country comparison to the world: 4

    Exports - Commodities

    agricultural products (soybeans, fruit, corn) 9.2%, industrial supplies (organic chemicals) 26.8%, capital goods (transistors, aircraft, motor vehicle parts, computers, telecommunications equipment) 49.0%, consumer goods (automobiles, medicines) 15.0%


    ...which would mean the US exports half a trillion dollars' worth of capital goods, assuming those percentages cited in the commodities section are by value.

    Who are they, you ask? Deere, Caterpillar, Cummins, Corning, Intel, Cisco, to name a few off the top of my head.
  3. pspr


    The crazy part is that he wants to "close corporate tax loopholes" to pay for his corporate tax benny. I don't think that makes any sense.