According to Obama, one of these proposals, the "Small Business Jobs and Wages Tax Cut," will put more Americans back to work by giving businesses – particularly small business – a tax cut for new hiring. The new proposal will also provide tax incentives for businesses to expand wages for their employees.

Under the proposal, businesses will receive a USD5,000 tax credit for every net new employee that they employ in 2010. The total amount of the credit for any one firm will be capped at USD500,000, to ensure that the majority of the benefit is targeted at small businesses. Start–ups will be eligible for half of the tax credit.

In addition, small businesses that increase wages or hours for their existing employees will be reimbursed for the Social Security payroll taxes they pay on real increases in their payrolls. This bonus would be based on Social Security payrolls, so it would not apply to wage increases above the current taxable maximum of USD106,800.

Obama said that firms will be able to claim the credit on a quarterly basis.

The President also repeated an earlier pledge to eliminate all capital gains taxes on small business investment. Furthermore, he spoke of a new tax incentive for businesses of all sizes which invest in new plants and equipment.