US businesses get tax breaks in $15b jobs bill
Senate Majority Leader Harry Reid unveiled a $15 billion jobs bill Thursday that would offer businesses a payroll tax holiday for hiring unemployed workers and tax deductions for buying machinery and other capital expenditures.
Reid said the Senate would begin work on the measure, which he said would be the first of a series of jobs bills, when it returns from its Presidents Day recess Feb. 22. But his move angered a top Republican, who wanted a larger bill with more tax breaks.
“This is a simplified, focused bill that addresses our core priority — putting millions of Americans back to work by helping our business community thrive again,” Reid said.
Reid’s bill is a scaled-back version of an $85 billion proposal by the Senate Finance Committee that would extend the expiration dates of expanded jobless benefits and a federal subsidy to help laid-off workers pay for COBRA health insurance through May 31.
Reid’s move to set aside the larger, bipartisan proposal angered Sen. Chuck Grassley of Iowa, the ranking Republican on the Senate Finance Committee. “Sen. Reid’s announcement sends a message that he wants to go partisan,” said Grassley spokeswoman Jill Kozeny. “The Majority Leader pulled the rug out from work to build broad-based support for tax relief and other efforts to help the private sector recover from the economic crisis.”
That proposed three-month extension of expanded jobless benefits would help 374,000 Michiganians, said spokesman Norm Isotaloof the Michigan Department of Energy, Labor and Economic Growth.
Employers who hire someone out of work for at least 60 days would be exempt from Social Security payroll taxes on that employee in 2010.
Employers would also get a $1,000 income tax credit for every new worker retained for 52 weeks.
Reid wants to extend a tax provision so businesses can write off up to $250,000 of certain capital expenditures in 2010 rather than depreciate the costs over years.
Mike Batterbee, director of government relations at the Small Business Association of Michigan, said the payroll tax holiday would be marginally helpful, while the write-off provision would help many Michigan businesses.
“I don’t think the credit for hiring workers is going to affect anybody’s hiring practices, because you are making such a large investment in salary and benefits,” said Batterbee. “It might help businesses that are right on the edge of hiring, giving them incentive to go ahead and do it.”
Batterbee said the write-off “makes it more affordable to make investments in tough economic times. That helps the purchaser and the seller of equipment. We want this made permanent.”
Source: The Detroit News