FLEXIBILITY…. Barack Obama and his transition team had proposed a $3,000 tax credit for businesses, rewarding employers for every new hire they make. The proposal came under heavy (and accurate) criticism, and as of yesterday, it’s been scrapped.
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 last 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…. [O]pposition 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. This was never set in stone,” said a senior Obama adviser of the decision.
Well, good. This plan wasn’t going to work — there was no way to know if the tax credit would go to businesses that were planning to hire new workers anyway, and there was nothing to stop an employer from firing an employee, quickly re-hiring him/her, and then seeking the money.
From a political perspective, it seems there are two ways to look at this, and it’s largely dependent on whether one is inclined to give the incoming president the benefit of the doubt. On the one hand, Obama is (cue scary music) a “flip-flopper” — he proposed the tax credit, talked about it during the campaign, but then abandoned the idea, just because it wasn’t any good. Whatever happened to sticking to pointless principles, practicality be damned?
And then there’s the flipside. Obama, before even taking office, has already come to realize that there’s no value in dogmatism, especially in clinging to ideas that don’t withstand scrutiny. The policy wasn’t going to work? Fine, they said, it’s gone.
There’s something to be said for this kind of flexibility in governing. When Obama talks about being open to change and accepting good ideas from outside his own team, he seems to mean it.
As for this specific change, the $3,000 tax credit was poised to cost as much as $150 billion in the $775 billion package. No word yet on where this money will now be redirected.