Casey proposal would provide a 20% credit to small businesses
WASHINGTON, DC-U.S. Senator Bob Casey (D-PA), who has outlined a job creation tax credit to provide a 20% credit to small businesses and a 15% credit to larger businesses on increases in payroll, welcomed the continued discussion of the details of a job creation tax credit as President Obama outlined his proposal.
“I’m pleased that President Obama is continuing to advocate for a job creation tax credit. Economists and the Congressional Budget Office have identified such a credit as one of the best ways to put Americans back to work and to boost the economy.
“The Senate is expected to take up jobs legislation soon. I look forward to continuing to work with the White House and my Senate colleagues to pass a job creation tax credit and to help small businesses and the 560,000 unemployed Pennsylvanians.”
Senator Casey’s proposal builds upon the jobs tax credit enacted in 1977 and was responsible for the creation of 700,000 jobs. Employers who increase their payroll by hiring new employees will be eligible to receive a tax credit.
According to a report released by the Congressional Budget Office (CBO) earlier this month: “Providing tax credits for increases in payrolls would increase both output and employment.”
Employers would only receive the credit if they increase payroll. This would address potential fraud where employees are let go and then rehired in order to obtain the tax credit.
Small businesses are the backbone of the American economy and are the real jobs engines of our economy. In recognition of this and to have the maximum impact on job creation, small businesses would receive a larger credit than large employers. The proposal would provide a tax credit of 20% for small employers and 15% for large employers – those with more than 100 full-time employees.
The credit would only apply to an employee’s wages up to the Social Security wage base of $106,800.
The employer would be eligible to receive the tax credit for one year.
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