Saying the economy is not generating jobs at a fast enough pace, U.S. Senator Bob Casey (D-PA) wants to give tax credits to companies that expand their workforce.
Casey today introduced The Small Business Job Creation Act of 2013 which would give a tax break to businesses that hire new workers and increase wages. Based on current average weekly earnings of private sector employees, a business would receive a tax break of approximately $4,250 over the course of the year for hiring an additional employee.
The private sector created 168,000 jobs in December.
“The economy is in a position now where it is growing; creating jobs at a good pace, but not nearly good enough,” said Casey. “We can’t continue to have a job creation situation where we’re creating 150,000 jobs a month or 160, but we need to arrive at a point where the economy is creating 200 a month, 250, and this is one way to get us there, it’s not the only way but it is one way to help get us there.”
In summary, The Small Business Job Creation Act of 2013 would:
- Provide a tax credit of 10 percent of the excess year over year payroll increases.
- The credit is calculated by quarter and is a payroll tax (FICA) credit.
- In order to target the tax credit to small businesses, the proposed credit is capped at $500,000 per firm.
- For companies with 100 or more employees, the increase in payroll must exceed 3 percent of qualified payroll for the quarter in the preceding year to qualify for the credit.
Casey said Congress has to do more than reaching fiscal cliff agreements. "Even if you do a really good job on reducing spending and finding new revenue by way of rates or tax reform, the third element here that we can’t lose sight of is you’ve gotta have a growing economy. You can’t be successful over time deficit reduction if you’re not growing; and this is one way to keep growing.”
Casey cited support from Dr. Mark Zandi of Moody’s Analytics and co-founder of Economy.com.
“But in 2010, he (Zandi) called this kind of idea (the tax credit for jobs) quote ‘the best idea currently under consideration for ensuring the U.S job machine kicks into full gear’ unquote, so I couldn’t have said it better myself.”