On Tuesday, Democrats in the Senate introduced a new bill, the Small Business Jobs and Tax Relief Act, which could generate almost a million jobs nationwide, with over 630 thousand jobs for small businesses alone, through tax credits for those small businesses designed to help them expand their payrolls or increase salaries for existing employees, and in a report from Regional Economic Models, Inc. (REMI), a private economic forecasting firm, they estimate the bill would add $87 billion to the GDP and increase personal incomes by $73 billion. The bill is estimated to cost $28 billion.
The bill would give small businesses a 10% tax break for hiring new employees or raising the wages of their current employees, and caps the benefit at $500,000, which would specifically target small business employers. It also extends the 100% depreciation deduction, which allows business owners to write off large purchases, such as equipment, in their entirety for the tax year in which they were purchased, rather than having to depreciate those purchases over several years. So, say Suzi Q goes out and buys $50,000 worth of kitchen equipment for her café, instead of having to write that off over a depreciation period of ten years, she can write off the entire $50,000 for credit on her taxes for 2012.
Not bad, huh?
And on the jobs front, the report from REMI shows that nearly one million jobs would be created by this bill in sectors and professions across the board. These are their projections for just a few sectors:
- Construction: 93,231
- Manufacturing: 60,620
- Wholesale Trade: 39,151
- Retail Trade: 111,428
- Finance and Insurance: 69,685
- Real Estate and Rental and Leasing: 36,593
- Professional and Technical Services: 69,421
- Administrative and Waste Services: 63,781
- Health Care and Social Assistance: 115,641
- Accommodation and Food Services: 57,489
This is a no-brainer, for heaven’s sake, as Sen. Chuck Schumer (D-N.Y.) pointed out:
“Creating close to one million jobs would put a meaningful dent in the unemployment problem. This tax cut is not a cure-all, but it could be a difference-maker for small firms on the fence about adding payroll. After last month’s sluggish jobs numbers, we may be on the verge of a rare moment of agreement on how to help the economy.”
It’s not perfect, obviously, but at least it’s something, which is more than can be said for Republican efforts – of which there have been none.
Of course, now we’re all waiting to hear what the Republican excuse will be for blocking the bill…