A tax credit that is available to business owners who hire new workers who have been unemployed for at least 60 days and a credit given to business owners to keep these workers employed for over a year has been said to have helped many unemployed men and women finally find a job. However, there is concern that the tax credit to hire workers is not enough, nor a good way in which to stimulate job growth in our nation.
While this tax credit has been available there are those who believe that simple incentives to hire workers is not going to be enough to help small business owners sustain these new hires or create more jobs over the long run. Many businesses would like to see an increase in consumer spending or demand before they began adding workers to their payroll, and it obviously goes without saying that before these workers can be retained for the long-term business must get better for these companies.
However, business owners that can afford to hire new workers can benefit from this tax credit if they qualify and fall within the guidelines that the credit requires. While there are some restrictions to the tax credit, an example of which would be hiring a contractor as a full-time employee would not count as a new hire, there are some business owners who may be able to add to their workforce and avoid having to pay Social Security taxes on these new hires. Also, workers who retain a new hire for one year may receive up to a $1000 credit, which would be simply a general business tax credit.
While this tax credit does have benefits, meaning it may provide unemployed individuals the opportunity to obtain a job seeing as how small businesses employ around half of America’s workers, there is concern about the long-lasting effects of prompting businesses to hire employees that they may not need. While arguments against this view believe that when more Americans have jobs they, obviously, have more money to spend, which can translate to better business in their local economy, which can create an atmosphere where employers will need to hire.
Yet, overall demand for goods and services has been down in many areas and sectors of the economy and, despite this tax credit, many employers are still reluctant to add workers since there is less demand on the part of consumers and limited access to capital through small business loans, in some cases. While a small business bill is still being debated in Congress, it’s hoped that new legislation may provide tax breaks for businesses, funding for SBA loans, and along with this tax credit, it is hoped that small businesses will have excellent conditions to not only grow and become more profitable, but also hire new employees as well.