The Hiring Incentives to Restore Employment, or HIRE, exempts wages paid to qualifying workers from the employer’s 6.2 percent share of Social Security payroll taxes for the remainder of this year, and gives an additional $1,000 tax credit to employers for every worker they retain for 52 weeks.
The Treasury estimates that so far 4.5 million workers are eligible for the payroll tax exemption — a potential tax savings to employers of $8.5 billion — but Treasury officials worry businesses are unaware of the credit and might not take advantage before it expires in December. The administration will likely push for an extension. Because the tax-credit program originally was budgeted to cost $13 billion, the administration would not necessarily add to the budget deficit if it succeeds in getting wider participation in the effort.
Not to be all sourpuss all the time, but something a certain set of us old-fashioned liberals can’t quite understand about post-1993 Democratic Party politicians is why on earth does everything need to be so complicated? Are the benefits of targeting and relabeling everything as a form of tax cut really going to outweigh the fact that they’ve created a program that businesses don’t even know exists? Is it politically smart to structure a tax cut in such a way that the workers whose taxes are being cut won’t even realize what’s happening, and will thus blame deficit increases on out of control spending?
I understand that it would take time to set up and administer a program that gives public works / public services jobs to the long-term unemployed, but given that we’re now forecasting elevated unemployment for years doesn’t that just mean it’s time to get started?