Small Businesses Who Hire New Employees May See Tax Credits

Small Businesses Who Hire New Employees May See Tax Credits

Wednesday, January 27,2010 05:15 AM

Obama's Jobs Tax Credit: Will It Succeed In Boosting Small Business, Creating Jobs?

WASHINGTON — President Barack Obama's push to create jobs includes a new tax credit for small businesses that add employees, an idea that fell flat in Congress last year and continues to have skeptics this year.

The idea has appeal as the nation struggles with an unemployment rate topping 10 percent. But House Democrats left out Obama's proposal when they passed a jobs bill in December because they didn't know how to target the credit effectively. The Obama administration still hasn't provided details on how the tax credit would work, and some tax experts question whether it would.

"It's very hard to know when a company is incrementally adding jobs because of a tax credit, and when they would have done it anyway," said Eugene Steuerle, a Treasury Department official in the Reagan administration who is now co-director of the Tax Policy Center, a Washington think tank. "I'm sympathetic to subsidizing low-wage jobs. It's just a question of how you design it."

Congressional researchers say a tax credit for firms that increase payroll could be a good way to increase employment, if the credit is available to all companies, not just small businesses. They cautioned, however, that it would be difficult to administer.

Read more: http://www.huffingtonpost.com/2010/01/26/obamas-jobs-tax-credit-wi_n_436574.html