From USA TODAY, “$5,000 tax credit for each new job a big part of Obama’s plan,” reporting on the President’s State of the Union reaffirmation of a campaign pledge, “I’m also proposing a new small business tax credit — one that will go to over one million small businesses who hire new workers or raise wages.”
There’s only one problem: Business groups say the credit won’t do much to boost hiring.
“I really don’t think it’s going to be much of an incentive,” says Bill Rys, tax counsel for the National Federation of Independent Business. “Mostly it is going to be used by businesses that would have been hiring anyway.”
The National Association of Manufacturers is promoting its own job-creation package, featuring a cut in corporate income tax rates and a more generous tax credit for research and development. The group considers those changes more important than the $5,000 tax credit.
“For those manufacturers who are looking to hire, this will help,” says spokeswoman Erin Streeter. “We don’t anticipate this tax credit being a reason for them to hire. Our members are going to hire if there is a long-term need.”
Erin is referring to the NAM’s new Milken Institute study, “Jobs for America.”
Very few people take the tax credit for hiring seriously as anything other than politics.
