GOP leaders: We might support tax breaks for business in Obama jobs plan

WASHINGTON (Reuters) - Sounding cooperative but drawing a firm line on tax increases, House Republican leaders said on Friday they see some areas of possible agreement with President Barack Obama on his jobs plan.

Extending a tax break for businesses that allows them to write off the value of new equipment purchases is one area of common ground, the leaders said in an open letter to House Republicans.

But the president's proposed 28 percent cap on itemized deductions, affecting mostly wealthy taxpayers, is "a tax increase on charitable contributions, mortgage interest deductions, and municipal bonds for states," the memo said.

Republicans also rejected many of the spending proposals in Obama's plan, including more money for state and local governments to help retain teachers, police and firefighters.

They also said they opposed new money Obama seeks for school construction, saying it should be left to the states.

"We don't question the president's sincerity when he says he has crafted the right prescription for economic recovery," said the letter from House of Representatives Speaker John Boehner, Republican leader Eric Cantor, Republican Whip Kevin McCarthy and Conference Chairman Jeb Hensarling.

"We don't agree with portions of President Obama's proposal ... We are, however, committed to passing legislation to implement the policies in the areas where agreement can be found to support job creation and long-term economic growth."

Obama wants to extend a payroll tax cut for workers for another year and expand it to employers. The Republican leaders voiced concerns about the temporary nature of the tax breaks and about the proposed tax increases Obama wants to offset the costs of his $447 billion job-creation plan.

(Reporting by Kevin Drawbaugh, Richard Cowan and Donna Smith; Editing by Eric Beech)

Source: Reuters US Online Report Politics News