Here’s a brief look at what will be required for a business to be granted a ‘tax incentive’:
Rick Klahsen, a tax expert at the accounting firm RSM McGladrey, said his clients need to see business pick up before they can hire more workers.
“If demand were increased, they are saying it will take care of itself because I will then have the motivation to go out and hire new employees,” Klahsen said.
The bipartisan Senate plan would exempt businesses from paying a 6.2 percent Social Security tax on the wages of new employees, as long as the workers have been unemployed at least 60 days. The tax break would run through the end of the year.
A company could save a maximum of $6,621 if it hired an unemployed worker after the bill is enacted and paid that worker at least $106,800—the maximum amount of wages subject to Social Security taxes—by the end of the year. The company could get an additional $1,000 on its 2011 tax return if it kept the new worker for at least a full year.
So … a company could save $6,621 if it pays a worker $106,800? And what if the guy isn’t worth $106,800? I don’t see too many companies that are barely surviving now to shell out that kind of money for a possible 6 grand savings.
CBO estimates that such a tax break would generate only eight to 18 full-time jobs per $1 million in tax breaks.
What rocket scientist came up with this? Gawd, and this is supposed to be part of a “Jobs Bill”.
Bipartisan jobs bill won’t add many jobs.
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