Steven Ohlemacher of the Associated Press reports that President Obama has proposed a tax incentive for small business to add new workers:
Lawmakers have been working for several months to develop a tax credit for businesses that hire workers, but they have been unable to figure out how to do it in a way that won’t be abused. Neither Obama nor his top advisers offered details Tuesday. They didn’t say how big the tax break would be nor how it would be administered. Obama pledged to work on the issue with Congress.
“I believe it’s worthwhile to create a tax incentive to encourage small businesses to add and keep employees and I’m going to work with Congress to pass one,” Obama said.
Tax experts think a jobs credit may be unworkable:
Some tax experts said it would be difficult to fashion a tax credit that efficiently provides an incentive to small businesses to add workers. Do you offer a tax break for simply increasing payroll, or do companies have to hire more workers? How long must companies keep the workers? How would the requirements be enforced?
And some Republicans question the idea:
“You’re trying to subsidize people for doing things they wouldn’t otherwise do, but we don’t know what they would otherwise do,” 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.
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