New Government Jobs Proposal
In January, the federal government unveiled a proposal to establish a $33 billion package of tax credits that would serve to encourage small businesses to hire more workers and increase wages. The proposal is part of a larger effort to spark a rosier trend in current unemployment rates throughout the country.
Under this proposed plan, businesses would receive a $5,000 tax credit for every additional new employee that they employ in 2010. The total amount of credit would be capped at $500,000 per business to prevent larger businesses from being eligible. Additionally, the proposal also calls for reimbursement in Social Security payroll taxes (up to the Social Security taxable maximum) to small businesses that they would otherwise pay on increases in payroll.
Should this plan be set in motion, your small business faces a decision: To hire or not to hire?
The answer might actually come in the form of another question: Do you need to?
While the proposed tax credit sounds appealing, if your small business is comfortably meeting demand or the current work load of employees is manageable, your business might not stand to benefit from the push to hire more workers. Don’t fix something that isn’t broken. Instead, consider focusing on maintaining and growing your customer base.
However, if you were considering hiring this year, this could be your incentive to seriously think about doing so. Or, if you see your small business growing in the near future, now may be the time to take things to the next level.