by Dan Danner
The National Federation of Independent Business
While we appreciate the focus on jobs, they don’t seem to understand that small businesses only create jobs if they have customers and the cost of a new job is affordable and predictable. So we continue to deliver the message: If what you’re going to do doesn’t help the nation’s best job creators, specifically new employer healthcare mandates and tax increases, then don’t do it!
The jobs bill before Congress does contain a couple of tax proposals that could provide some benefits to some small business owners, but we think they’re in no way a major incentive for you to hire new workers.
For example, one provision provides payroll tax relief. It eliminates your portion of the 6.2% FICA tax if you hire someone this year who’s considered long-term unemployed (defined as 60 days or more).
We’ve been beating the drum for this type of relief for nearly two years. But what the Senate has done is far too narrowly focused to be useful. They don’t seem to get that the more conditions that are placed on tax relief, the fewer businesses will see that relief. Of course, if you have a great candidate who hasn’t been unemployed for 60 days, you’re out of luck unless you wait to hire. But if you need a worker, you need them now, so the credit is no help.
Then there’s the hiring tax credit, which is now $1,000 rather than $5,000 as originally proposed. In addition, the worker must be retained for 52 weeks before you’d qualify for the credit on your 2011 return. Clearly, the credit is much too small and is received much too long after hiring to have any real impact.
And once again, we see an extension of Section 179 expensing at $250,000 to provide a deduction for purchasing certain equipment. We’ve supported this extension in the past, and the higher expensing limits will help a business making an investment this year. But the economic recovery will take time. Higher expensing limits should be in place longer and provide some certainty for your investment planning purposes.
We continue to hear from many of you that you’re concerned about uncertainty, whether it’s tax extenders, the expiring individual tax rates or the unresolved estate tax. It’s one of the main problems plaguing small businesses today. That’s why keeping current lower individual tax rates in place is so important.
You should be able to keep the money you earn to invest in and grow your business. The government needs to understand that as economic activity picks up, you’ll use that money to hire new workers, expand facilities or invest in new equipment. You have the know-how to grow your business, and you know best what’s needed to keep the business operating successfully. Rather than tinkering around the edges of tax relief, Congress should take meaningful action to support your efforts, and then get out of the way.