Small Business Stimulus

President Obama has proposed new economic stimulus to the tune of $25 billion to offer tax breaks to companies to hire workers or pay them higher salaries. The tax breaks would target small businesses and refund 10 percent of the cost of new payroll "?u in the form of new hiring or new wages "?u up to a total of $500,000 next year.

The President's small-business tax-break idea is significant because it is the first time since the election that the president has specifically come out for a new policy that would seek to provide additional government support for the economy next year.

Obama also wants to allow companies to deduct the full cost of investments from their taxes for another year "?u a proposal that would allow companies to save $50 billion next year on taxes.

"An incremental jobs credit could be a cost-effective way of raising employment in the short run," a nonpartisan center said in a report this year. The effectiveness of any jobs subsidy depends . . . on how employers perceive its potential benefits when making hiring decisions."