Talking Out of All Sides of His Mouth?

Obama Against a Compromise on Extension of Bush Tax Cuts - NYTimes.com

President Obama is going back to Ohio. He says that the Bush tax cuts should be allowed to expire for the wealthiest Americans (those married couples making over $250,000 per year). This would allow the top federal tax bracket for these wealthy individuals to climb to 39.6% from the current 35%.

At the same time, he intends to propose that businesses be allowed more aggressive capital asset expensing options. Essentially, many businesses would be allowed to write off 100% of the cost of certain assets in the year placed in service under proposals he intends to outline today in Cleveland. Essentially, this represents an extension of bonus depreciation rules that have allowed for accelerated depreciation deductions in prior years.

He also intends to outline proposals extending the research and experimentation tax credit for many businesses. The research and experimentation credit has expired for 2010. The research and experimentation credit has been labeled by the administration as the cornerstone of restoring the United States' competitive stance in the world. Unfortunately, Congress and past administrations have not made the credit permanent in the law. This means the credit has frequently expired and requires legislative action to put it back into law after each expiration. That does not sound like the cornerstone of anything.

Many believe the credit would have been reinstated retroactive to January 1, 2010 under an "extenders" package that may be passed by Congress before the end of 2010 in any event. President Obama just beat Congress to the microphone.

Aren't these proposals tax cuts? Many small business people who make more than $250,000 will benefit from 100% bonus depreciation and research and experimentation tax credits.

So...do we have a tax rate increase that might be offset by additional deductions and credits? Same as it ever was...