Congress has introduced the Hire Now Act to provide a 10 percent tax credit for businesses that create new jobs (read new hires) or pay more to those currently working for the business. Don’t get too excited as this is an election year and not much is likely to actually become law until after November 6. It limits the income of an individual employee covered under the tax credit to $110,000 (that’s a waiter in New York City living at the poverty level).
While I can’t speak for everyone, though I have been known to try, our hiring practices and compensation levels are business decisions and this is not an “incentive” to modify the process we use to decide to hire new employees or how we pay existing employees. It will, if passed, add to the work our firm does at year end to determine if our clients actually hired someone new, because they needed them, and we can get them a credit of $500-1,000 by completing another form numbered in the 8000’s, only if the cost of doing the computation is less than the credit.
Now that is how you stimulate the economy.