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Geithner: Tax changes helping economy

Jan. 14, 2011 at 9:30 PM   |   Comments

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WASHINGTON, Jan. 14 (UPI) -- Tax changes approved by the lame-duck Congress should help kick-start economic growth, U.S. Treasury Secretary Tim Geithner said Friday.

Geithner said employees will see the effect of the payroll tax holiday in paychecks this week with the average worker getting $700 more in take-home pay a year and the average working couple $1,300.

The tax holiday will funnel $112 billion into the economy, he said.

Geithner also pointed to another tax provision that allows business owners to deduct the full cost of new equipment. He called it "the largest, most powerful incentive for business investment I think we've ever done as a country."

Economists are forecasting 3 percent to 4 percent growth in the U.S. economy, substantially more than they predicted in the summer, Geithner said. He said the tax changes could add 1.5 million jobs.

"And that's partly as a result of the tax package and it's partly because the economy was gaining some momentum over the course of the fall," he said.

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