WASHINGTON, DC-U.S. Senator Bob Casey (D-PA) today was joined by original cosponsors Senators Kirsten Gillibrand (D-NY), Carl Levin (D-MI) and Mark Begich (D-AK) in introducing legislation to create a job creation tax credit.
“Over the last couple years the U.S. economy has steadily shed jobs and wages have largely been stagnant,” said Senator Casey. “We have made progress responding to the economic crisis, but more needs to be done to get people back to work. Times are still tough across the board and margins are slim. That is why I am introducing this job creation tax credit to help employers hire workers, put money back into local economies and spur economic growth.”
“While some sectors of the economy are doing better, middle class families and small businesses across New York are struggling in this economic crisis,” Senator Gillibrand said. “We need to take aggressive action to help businesses create good-paying jobs and get New Yorkers back to work. The job creation tax cut would encourage businesses to begin hiring now instead of waiting for the economy to stabilize months or years down the road. It could create millions of new jobs at a time when unemployment is continuing to rise and nearly 850,000 New Yorkers are out work. Giving small businesses an incentive to create jobs is the right strategy to continue our economic recovery and create jobs for the thousands of New Yorkers who are ready to work.”
“Michigan has been among the hardest hit in the nation by unemployment, and so I am eager to join with my colleagues to propose this job creation tax credit,” Levin said. “It is a sensible way to get businesses hiring again and keep our economy on the road to recovery.”
Senator Begich said, “I am pleased to join Sen. Casey, as well as my other colleagues, in supporting legislation to put Americans back to work. In my home state of Alaska, unemployment has reached a record 8.8 percent. I will continue to work on finding ways to help businesses hire workers and keep Alaskans employed.”
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) last 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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