U.S. Sen. Feingold On the Need for a Jobs Tax Credit
By
Sen. Russ Feingold
Washington, D.C. – U.S. Senator Russ Feingold (D-WI) released the following statement today after jobless claims numbers were released:
“The latest jobless claims report shows that the overall employment picture is still very tough, and it demands action from Congress. As I draft a temporary jobs tax credit proposal, I am very pleased with the support this idea has received from my colleagues, and I am committed to moving the proposal forward when the Senate considers jobs legislation. Congress needs to focus on getting more Americans back to work, and the jobs tax credit proposal is a proven way to create jobs and help people get back on their feet.”
Feingold recently announced he would be introducing a jobs tax credit bill. Below is a fact sheet on the proposed legislation:
Feingold Jobs Tax Credit Fact Sheet
U.S. Senator Russ Feingold is drafting legislation to establish a temporary jobs tax credit to encourage firms to hire more workers. The legislation is based on a proposal from the Economic Policy Institute, and while precise details of that proposal may change as the legislation evolves, here are key facts about the tax credit as it stands now.
Senator Feingold’s bill would create a 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.
The credit would be 15 percent of eligible payroll for 2010 and 10 percent of eligible payroll in 2011.
Eligible payroll includes that portion of a firm’s wages subject to Social Security taxes. (Note: For 2009, those are wages under $106,800.) Thus, pay hikes for very highly salaried workers would not be eligible for the tax credit.
As noted above, the credit would 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.
To avoid seasonal employment spikes the credit is calculated on a quarter over-year-ago-quarter basis. For example, wages for the first quarter of 2010 are compared with wages for the first quarter of 2009; wages for the third quarter of 2010 are compared with wages for the third quarter of 2009.
To avoid possible gaming of the credit the last quarter of 2010 would be measured against the last quarter of 2008, rather than 2009. This means a firm could not lay off workers this December and then hire them back in 2010 to capture the jobs credit.
The wages of firm owners and their family members would not be eligible.
Senator Feingold wants the cost of the tax credit to be fully offset so it will not increase the deficit.
Posted @ 9:00 p.m.
