On the recordJanuary 26, 2010
I am pleased to introduce legislation establishing a temporary jobs tax credit to help businesses expand their payroll here in the U.S. by hiring more employees, expanding work hours, or raising pay. The measure is modeled on a proposal by the Economic Policy Institute that would create an estimated 5 million jobs over the next two years. As we should not undermine the long-term prospects of our economy for the sake of a short-term problem, the legislation is fully offset to ensure that over the next 10 years it will not increase the deficit. Briefly, the legislation provides firms a tax credit of 15 percent of the increase in their eligible payroll in 2010, and 10 percent in 2011. Eligible payroll includes that portion of a firm's wages subject to Social Security taxes. For 2010 those are wages of $106,800 or less. Thus, pay hikes for very highly salaried workers would not be eligible for the tax credit. The jobs tax credit is designed to avoid seasonal employment spikes by calculating it on a quarter over-year-ago-quarter basis. For example, wages for the first quarter of 2010 are compared with wages for the first quarter of 2009; wages for the third quarter of 2010 are compared with wages for the third quarter of 2009. To limit possible gaming of the credit the last quarter of 2010 would be measured against the last quarter of 2008, rather than 2009. Only increased wages for employees here in the U.S. would be eligible for the credit.
