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.
Colin Grubb
In 2010, President Obama signed into law the Hiring Incentives to Restore Employment Act (HIRE). One of the provisions of the HIRE Act relates to additional reporting and disclosures for US taxpayers with interest in certain foreign assets in excess of $50,000.
I completely agree to your assessment. The O’baministration & Congress like to think they are fully in control of the economy & people’s thinking patterns. However, this (if passed) will end up in the same stimulus plans as the HIRE Act, [giving employer's exemption for Social Security Taxes from March 18th of '10 (remember had to report those two weeks of credit on 2nd quarter 941 and it was applicable for new hires from mid Feb '10!) & additional Corporate Tax Credit if employee last more than a year], the Making Work Pay Credit ’08 – ’10 [$400 per employee credit on Schedule M of their 1040], Employee Payroll Tax Holiday [reducing 'only' employees portion of Social Security Tax to 4.2%, while maintaining 6.2% for employer's], together with the ‘great’ unpopular Osama’s stimulus American Recovery and Reinvestment Act of 2009 [that was supposed to save 900,000-2.3 million jobs, as our ‘best’ V.P. Bite’in said that summer of ’09 will be known as the “Recovery Summer” & claimed Unemployment would be reduced & remain below 8% (and actually increased & has been over that 8% mark ever since signing that ‘great’ stimulus law. Moreover, when Osama took office in Jan ’09 the Unemployment rate was at 7.6%, in only 3 months (April ’09) it rose to 8.9% with additional 2,100,000 unemployed workers. Then in May ’09 (in just that month, incidentally 2 months after the stimulus was signed into law by his majestic emperor) it jumped an additional 1/2% to 9.4%. In June & July ’09, the “Recovery Summer” Unemployment continued to climb affecting 14.7 million people, or 9.5% of the work force. Aug ’09 Unemployment worsened to 9.7%, & in Aug unemployment went up to 9.8%. “So much for the “RECOVERY SUMMER” (I guess our great (Pres.) & V.P. had to recover from his Foot-In-Mouth disease. Then in Oct ’09 (8 months after failed stimulus passed with additional Billions (if not Trillions of dollars of OUR money) the UI Rate shot up again to a whopping 10.2%. Combining the first nine months of the Anointed one, the total US Unemployed workers spiked up on unheard & record breaking levels from 11.6 million to a staggering 15,400,000 people, and this does not count the under-employed or those that maxed out their UI Benefits & are discouraged former employees. That’s a ‘Recovery’ of adding an additional 33% of the existing UI level from when he took office, in just nine months. Following October ’10 through Dec ’11, the UI Rate was hovering between 10.2% to 9.5%. This is the true unemployment history from the US Bureau of Labor and Statistics (see chart attached) during the first two years of his presidency & with a full fuller-buster proof majority in both houses in Congress (Antonym of Progress).
http://data.bls.gov/pdq/SurveyOutputServlet
During the next 12 months, from when Republicans took control of Congress and decreased the Dem’s 60-40 majority in Senate to 53-47, by a decisive victory in the mid-term elections, the unemployment rate actually decreased (yet slowly) by a full 1% point and 1,635,000 prior unemployed workers got jobs or opened as a self-employed business. Ever since, during the current year the job market has been pretty steady with about 12.8 million unemployed at a rate of 8.3%.
Bottom line, Gov’t spending or so called tax “incentives” to employers do not create jobs or our spending habits. Quite the contrary, as you have seen from my detailed analysis of the unemployment rate in relation to the Stimulus Acts & Job / HIRE Acts. If you look on the whole picture over the past four years, independently, you will see that UI rate has negative correlation to Government interventions. So rather then wasting our time with this ludicrous HIRE Acts or Economy Stimulus Acts, let them get their “ACT” together by letting the economy improve by decreasing all their ill attended interventions and cutting away with their red-tape bureaucracy and regulations that hinder job growth.
As a writer once wrote “We need to acknowledge 1) that jobs are part and parcel of self-esteem in America, 2) that the structure of our society has changed and jobs are no longer sinecures; 3) that maintaining full employment is a legitimate role for a government; 4) that our national welfare and security depends on a working population. 5) that honest, hard-working people are the backbone of any free society and 6) that the alleged collective benefit (i.e jobs) provided the main impetus for tax cuts (as can be found in the 1920′s campaigns of the “British Fascists” who had a “novel suggestion for dealing with unemployment: if the income tax were lowered, the money could be used by gentlemen to hire more servants’). This is partially the term of “supply-side economics”, as an example of lower tax cuts effecting higher government revenues occurred during the 1920s. Tax rates fell from 60% to 25% for the highest brackets (those earning over $100,000) between 1920 and 1928, yet the income paid by those categories grew from $321 million to $714 million. During this period, the highest bracket changed from paying roughly 30% of all income taxes to 61%, and the lowest bracket (under $5,000) went from about 15% to 1%. Although this does not correlate taxes to other policies, it does illustrate that tax cuts are viable as part of a plan to stimulate higher revenue. ”
America is in the process of re-inventing itself (as it has done often in the past) and we can ill afford to be mean-spirited or callous to the question of unemployment.
Trust the people for a change. We have unfortunately trusted you, the Gov’t with all regulations’, Job Czar’s, Economy Czar’s (I always thought that, that’s a bad word that even the Socialists’ Russian’s called the administration chief’s Czar’s, and have since stopped using that term), Stimulus Crap or HIRE Act, Tax Holiday Act, etc. Just stop with your (playful) “ACTS” DemoCRATS (read last four letter again) and let the RepublICAN (read last four letters again) stop all these nonsense playful “ACTS” by easing the regulations & burdens on the employees & employers and let this great country become what it was The “UNITED” States of this great AmerICAN (read last four letters again). Hey, interesting it’s the same 4 letters as the end of RepublICAN!
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