Sunday, January 31, 2010

Obama’s Hiring Tax Credit

Overall… not the worst of ideas. 

Under the president’s proposed tax credit, businesses would receive a $5,000 tax credit for every net new employee that they employ in 2010. The total amount of credit will be capped at $500,000 per firm to ensure that the majority of the benefit goes to small businesses.

Though increasing payrolls would typically lead to an increase in Social Security taxes, under Obama’s plan, small businesses would be reimbursed for the Social Security payroll taxes they would pay on real increases in their payrolls, including wage increases. The reimbursements would not apply to pay raise that bump compensation above $106,800, the Social Security taxable maximum.

Just like with Cash for Clunkers, this will primarily benefit companies that were planning on hiring anyway, but that’s not a bad thing in this case.  For some companies that are on the bubble between hiring a net new employee or just asking for more production out of their current employees, this might push them over the edge into hiring.  I also like that it’s targeted primarily at small businesses which are our largest job engine. 

I support this measure.

(3) Comments
Posted by Owen at 1009 hrs
Politics + Politics - General

  1. Your take’s about the same as mine.

    I’d rather an overall corporate-income-tax reduction to, say, 10% of net, but this is better than nothing.

    Posted by dad29 on January 31, 2010 at 1918 hrs


  2. The lesser of two evils is still evil, guys.  this is no better for the economy than a one-time tax rebate.

    Posted by Steve on January 31, 2010 at 1951 hrs


  3. A $5000 tax credit for a job that will cost you what??? 6-10 times that in compensation for the person… makes no sense!!  If that makes sense I have a $10 Bill I would like to sell to you for a penny!!

    Posted by .(JavaScript must be enabled to view this email address) on February 01, 2010 at 1623 hrs


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