Thursday, February 25, 2010

How the Jobs Bill's Tax Credit Affects Business

The jobs bill passed by the Senate yesterday is already under fire, with critics claiming the legislation is all talk, and very little action. According to this article from SFGate.com, although the bill is meant to create jobs it is actually more likely to give tax breaks to business owners that are likely to hire new employees anyway. You can find more of their story below:

Desperate to look like they're working on jobs, the Senate passed a bill Wednesday that its backers say could create more than a million new positions by giving employers tax incentives to hire and retain the unemployed.

Critics say the bill is likely to reward employers who would have hired people anyway and will lead to little net increase in employment.

"If demand is not out there, they are not going to hire workers," says Sophia Koropeckyj, a managing director with Moody's Economy.com. "Obama and the Congress are under pressure to do something and this is something."

The bill includes what sponsors call the Hire Now Tax Cut. Under this provision, private-sector employers that hire a "qualified" unemployed person would not have to pay its share of the new worker's Social Security tax - 6.2 percent of wages - for the rest of the year. They say this would give the employer an incentive to hire sooner rather than later.

Continue reading at SF Gate.com…