Congress Daily: Casey Pushes for One Year Credit for Hiring

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Casey Pushes for One Year Credit for Hiring

Source: Congress Daily

By Humberto Sanchez

Sen. Bob Casey, D-Pa., plans to introduce legislation next week that would provide a tax credit for one year to businesses that increase their payrolls, an idea he hopes to include in jobs creation legislation being drafted by Senate Democrats.

"We know the reality," Casey said in a conference call alluding to the nation's 10 percent unemployment rate. "We have to put in place new strategies."

He said he sees the proposal as part of Senate Democrats' work on drafting a jobs bill.

Under the plan, businesses with fewer than 100 employees -- designated as small businesses -- would be eligible for a 20 percent tax credit if they increase their payroll over the same quarter of the prior year. Small businesses also would have to maintain the same number of employees as the previous quarter in order to receive the credit.

Large businesses, which must have at least 100 employees, would be eligible for a 15 percent tax credit, but must have an increase in payroll of at least 3 percent over the coinciding quarter from the previous year and cannot decrease the number of employees from the previous quarter.

Casey added there are limits on the credit that would make it more focused, including capping the maximum a business can receive at $350,000. The proposal is estimated to cost about $20 billion, but a more definite score will come later, Casey said.

Casey added that he is looking at several offsets, but did not provide any candidates. But he said he believes, given the nation's high unemployment, the provision should be implemented as soon as possible even if no offsets are agreed upon.

Roughly 5.5 million businesses could benefit from the credit, including about 4 million small businesses, Casey said.

Casey believes the jobs tax credit idea is "a proven jobs creator," citing a similar proposal enacted in the 1970s which he said created about 700,000 jobs. The idea also got a favorable review from the CBO in a report today on strategies to boost employment this year and next. "Providing tax credits for increases in payrolls would increase both output and employment," the CBO said. It added that the provision would have an impact this year.

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