Obama to propose plant, equipment tax write-off

WASHINGTON (Reuters) - President Barack Obama will propose on Wednesday that businesses be allowed to write off all their new investments in plant and equipment through 2011, an administration official said on Monday.

The plan, aimed at jump-starting job growth, would cut business taxes by some $200 billion over two years, the official said.

Obama is to unveil the proposal at a speech in Cleveland on Wednesday. The plan would require congressional approval, and with Republicans in no mood to compromise with congressional elections less than two months away, its prospects are unclear.

The proposal is among several the president is to lay out in Cleveland. Administration officials said he will also propose making permanent the business tax credits for research, which the White House projects will cost $100 billion over 10 years and would be paid for by ending some corporate tax breaks.

Obama is trying to boost the economy as well as help his Democrats limit anticipated losses in November 2 congressional elections.

Economic growth, which had been fueled by a record $814 billion government stimulus program, has slowed sharply, raising alarm in financial markets the economy was sliding back into recession.

The tax write-off would be retroactive to September 8, the day the president announces it, the official said. The hope is that businesses would go ahead and make investments in plant and equipment without waiting for congressional approval of the proposal.

The official said as many as 1.5 million businesses could take advantage of the proposal.

(Reporting by Steve Holland; Editing by Eric Beech)