Just in case you did not hear the obvious, President-elect Barack Obama declared that the national economy was “bad and getting worse” as he began crisis talks this week with congressional leaders on emergency action.
Though Obama did not disclose his entire proposed stimulus
package, there is belief that a provision in it would award a one-year tax
credit to companies that hire new workers, and would provide other incentives
for business investment in new equipment. Details will be revealed soon enough,
but the industry is looking for more incentives regarding the purchase of more
energy-efficient HVACR systems. This would be a big boost for the industry,
that’s for sure.
According to Associated Press reports, Obama's proposal to
stimulate the economy includes tax cuts of up to $300 billion, including $500
tax cuts for most workers and $1,000 for couples, as well as more than $100
billion for businesses. The total value of the tax cuts would be significantly
higher than had been signaled earlier. New federal spending, also aimed at
boosting the tight economy, could push the overall package to the range of $800
billion or so.
According to most reports, the tax cuts for individuals and
couples would be similar to the rebate checks sent out last year by the Bush administration and Congress in a bid at that time
to boost the slowing economy. A key difference, however, is that the tax cuts
this time around may be awarded through withholding less from worker paychecks.
That provision would cost about $140-150 billion over two years, according to
For businesses, Obama’s plan would also allow firms incurring
losses last year to take a credit against profits dating back five years
instead of the two years currently allowed. This is good news for the
It should be interesting to see what unfolds after Obama takes
office on Jan. 20. Here’s hoping the HVACR industry is not left in the cold in
the new president’s term.