SCHUMER: HUNDREDS OF THOUSANDS OF NEW YORK'S UNEMPLOYED ARE ELIGIBLE TO BE HIRED THROUGH SCHUMER'S BIPARTISAN "HIRE NOW TAX CUT" THAT PASSED THE SENATE THIS MORNING; BUSINESSES WILL HAVE NEW INCENTIVE TO HIRE PEOPLE WHO HAVE BEEN OUT OF WORK FOR 60 DAYS OR MORE
Bipartisan Measure, Sponsored By Schumer And Orrin Hatch (R-Utah) Is Tax Cut For Businesses That Hire People Who Have Been Unemployed More Than 60 Days -Passed The Senate This Morning with 70 VotesPlan Focuses on Small and Midsize Businesses and Middle Class WorkersSchumer: Low Cost, Highly Effective Jobs Proposal Will Be a Win for New York and the Country
Today, U.S. Senator Charles E. Schumer announced that his bipartisan "Hire Now Tax Cut" proposal to provide businesses that hire unemployed workers with a tax cut has passed the Senate this morning with 70 votes. Schumer has joined with Orrin Hatch (RUtah) to offer a tax cut to businesses that hire a worker that has been without work for at least 60 days prior to employment. The businesses will avoid paying the employer's share of Social Security taxes on that worker for the duration of 2010. The more a business pays a worker (up to the maximum Social Security wage of $106,800), and the longer a business has a worker on its payroll, the greater the tax benefit so there is an incentive to hire people sooner, and pay them more. The benefits go immediately into a business' cash flow no waiting until 2011 to receive a tax credit. Schumer's legislation was been included in the Senate jobs bill, which passed the Senate this morning. The measure passed with 12 Republican votes. The House is expected to also pass the legislation, meaning it could go to President Obama's desk in the coming days. Schumer has presented the proposal to small and large businesses around the state, as well as unemployed workers.
"Both sides of the aisle have heard the call to focus on jobs," said Schumer. "This proposal is not a panacea, but it will start the long process of putting people back to work, and I hope it will also be the crack in partisan dam that has caused so much gridlock in Washington."
Schumer said that the SchumerHatch proposal has many advantages over previously suggested hiring related tax cut ideas, and has therefore received an overwhelmingly positive reaction from lawmakers on both sides of the aisle, as well as the White House. Schumer said the plan had the following advantages and benefits: " Simple. The SchumerHatch idea is easy to explain and administer: "No employer payroll taxes on unemployed workers hired in 2010." Since the proposal is for a complete elimination of the 6.2 percent payroll tax for eligible workers, rather than a fixed or capped dollar amount, employers will know to simply zero out the tax for eligible workers. " Focused. Given our budgetary constraints and the nagging problem of longterm unemployment, any employment incentive should be focused on the hiring of workers who are currently unemployed. Only by focusing on the unemployed can we get people off the unemployment rolls at an affordable cost to taxpayers. Plus, unlike some versions of a payroll tax holiday, this proposal is not biased towards either lowwage or highwage workers. Under the SchumerHatch plan, a business saves 6.2 percent on both a $40,000 worker and a $90,000 worker. " FrontLoaded. The credit provides an incentive for businesses to hire workers earlier in the year, because the tax benefit will be greater. A $60,000 worker hired on March 1st will save a business about $3,100 in taxes. " Immediate. In the current environment, no business wants to wait until next quarter or next year to receive a tax credit. Our proposal puts money into a business' pockets immediately, since the tax is simply not collected in the first place. " Affordable. The Joint Committee on Taxation estimates that this provision will cost $13 billion, a far lower cost than other proposals that are not focused on the unemployed, or that would give a credit based on any increase in payroll. The payroll tax reduction will be for privatesector jobs only, although nonprofit organizations and state institutions of higher education would be eligible; new jobs that are created by tax dollars in the first place would not be eligible. An employer cannot receive the benefit for hiring someone to replace an existing worker, unless that worker left voluntarily or for cause. To reduce doubledipping, an employer would also have to choose whether they wanted an employee to be eligible for the payroll tax relief or the work opportunity tax credit (WOTC), but not both. Finally, to promote long term employment, the plan also adds the following bonus: For any eligible employee kept on payroll for a continuous 52 weeks, the employer would receive an additional $1,000 credit on its 2011 tax return Schumer offered the following examples of savings that businesses would receive under this proposal: " Hire a $35,000 worker in March, save $1,808. " Hire an $80,000 worker in April, save $3,720. " Hire a $70,000 worker in May, save $2,893. Schumer said that close to 849,000 people in New York will be eligible to be hired by businesses who take advantage of the SchumerHatch program. Here is how the numbers break down across New York
" In the Capital Region, about 43,000 people will be eligible to be hired under this tax cut. "In Western New York, about 59,000 people will be eligible to be hired under this tax cut. "In the RochesterFinger Lakes Region, about 50,000 people will be eligible to be hired under this tax cut. "In the Southern Tier, about 31,000 people will be eligible to be hired under this tax cut. "In Central New York, about 42,000 people will be eligible to be hired under this tax cut. "In the Hudson Valley, about 83,000 people will be eligible to be hired under this tax cut. "In the North Country, about 25,000 people will be eligible to be hired under this tax cut. "In Long Island, about 102,000 people will be eligible to be hired under this tax cut. "In New York City, about 415,000 people will be eligible to be hired under this tax cut.
Senator Schumer has been leading the fight for middle class families in the United States Senate. Last year, he supported the American Recovery and Reinvestment Act (ARRA), which saved and created thousands of jobs across New York. The Recovery Act also included his proposal to create a college tuition tax credit of up to $2,500 per student, now called the American Opportunity Tax Credit. Recently, he took an innovative program that began in Ulster County and took it statewide in order to provide credit to successful small businesses that have been seen their access to capital limited during this current recession. Schumer added, "This is a winwinwin: it is a win for businesses, a win for the economy, and a win for job creation."
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