Senator Russ Feingold (D-WI) “introduced legislation today to help businesses hire workers and bring down unemployment through the creation of a jobs tax credit,” according to an e-mailed press release.
The legislation creates a temporary jobs tax credit over the next two years for businesses that hire new employees, expand work hours for their current workforce, or simply raise worker pay.
According to the release, this tax credit would:
- Amount to 15 percent of the increase in eligible payroll for 2010 and 10 percent of the increase in 2011.
- Make pay hikes for high-salary workers ineligible.
- Be based on a firm’s total eligible payroll so it would reward firms that expand work hours or raise pay as well as hiring more workers.
- Be calculated on a quarter over year-ago-quarter basis to avoid seasonal employment spikes. For example, wages for the first quarter of 2010 are compared with wages for the first quarter of 2009.
- Not be eligible for the wages of firm owners and their family members.
- Be offset so as to not increase the deficit.
A Congressional Budget Office report “estimated a similar jobs tax credit would boost gross domestic product by as much as $1.30 for every dollar spent, and would increase employment by as much as 18 net full-time equivalent jobs for every million dollars invested through the credit.”
(credit image – getty)