Tax Credits

Re "Are Some Children Worth More Than Others?" Commentary, Jan. 1: Hurrahs to the observation that in our society some children seem to be "worth more than others." Roberta Ikemi trenchantly observed that a current plan would create rewards or reprisals for additional children. I have been troubled with this plan that decides which children are worth support by increased benefits to middle-income households by a $500 tax credit per each additional child, while proposing to eliminate assistance for such a child on Aid to Families with Dependent Children.

A group of California visual effects artists is mounting a long-shot campaign to dismantle foreign film tax credits, contending that they hurt U.S. workers and violate international trade agreements. More than 150 visual effects workers in the last two weeks have donated funds to challenge the legality of foreign film subsidies that have buffeted California's visual effects industry. "We're fighting for the industry we love," said Rachael Campbell, a visual effects artist and campaign donor.

More than $360 million in small-business tax credits meant to spur hiring in California has been left on the table, raising concerns that the program wasn't working and that the appropriation will be grabbed back by the cash-strapped state. The funds were set aside nearly two years ago as a way to reward small businesses for bringing on new workers. But by the end of 2010, less than 10% of the money had been claimed. Tax officials were flummoxed by the low response, but small-business owners said the economy had been so poor that few were able to hire, even with the $3,000 that the credit would have provided.

Acting quickly on a pledge in his State of the Union address, President Obama today will unveil a proposal to give a tax credit of up to $5,000 to companies for every new employee they add to their payrolls this year. A separate measure would offset the additional Social Security taxes that employers pay for boosting wages or hours of existing workers. Both programs, which combined would cost an estimated $33 billion and require congressional action, are aimed at spurring small businesses to move swiftly to hire new employees and bolster an economy that is technically growing but reeling from double-digit unemployment.

President Obama will ask Congress to pass a $100-billion plan to expand and permanently extend the tax credits for businesses that invest in research and development, part of a larger plan for spurring the economy that he is to unveil in greater detail Wednesday. In an address at a Cleveland-area community college, Obama will call for an increase to 17% from 14% in one of the credit options available to businesses, an administration official said Sunday. Obama will propose paying for the plan in part by closing corporate tax breaks for multinational corporations and some energy companies.

A coalition of housing groups said implementing a homeownership tax credit similar to the one proposed by President Bush in his 2004 budget would create jobs, bring private investment to economically distressed neighborhoods and boost homeownership rates among people of all backgrounds and income levels.

In recent months, this city's soundstages have been teeming with film and television productions, the result of a generous tax credit aimed at luring more shoots to New York. But it remains to be seen how long those stages will be full. On Thursday, the state confirmed that it had run through the $515 million set aside for the tax credit program through 2013.

Home buyers hoping to take advantage of a new or extended tax credit should not procrastinate: This third bite at the apple will be the last. Proponents of the $8,000 credit for first-time buyers and the $6,500 credit for move-up buyers made it clear during the debate on Capitol Hill that the benefits would not be renewed when they expire. And a lobbyist for the National Assn. of Realtors confirmed that at the group's annual convention last month. Lawmakers "made us promise practically in blood that we would not come back" for another extension, Linda Goold, the Realtor group's director of tax policy, told her members.

An estimated 3.5 million Californians would be eligible for federal tax credits to slash the cost of their health coverage when they begin buying policies through a new statewide insurance marketplace in 2014, a study released Tuesday found. Under the nation's healthcare overhaul, tax credits will be available to low- and middle-income people once insurers begin selling policies through state-based insurance exchanges like the one being set up in California. The federal law requires most Americans to have insurance starting in 2014.

I wasn't thinking about tax credits when my 12-year-old water heater went on the fritz last fall. I was thinking about a hot shower. I called the plumber. A few sticky days and $1,000 later, I had hot water. Now, like millions of other consumers, I faced a tax challenge. The federal government decided to reward taxpayers who made their homes more energy efficient in 2009 by creating a series of tax credits for those who replaced furnaces, water heaters, air conditioners, insulation, doors, roofs, skylights and windows with more energy-efficient models.