A Democratic-backed proposal in the U.S. Senate aims to boost employment by targeting small businesses.
But one policy expert says it might not be so simple.
It’s standard fare for hard times: Want to prod employers to hire? Incentivize.
U.S. Sen. Bob Casey of Pennsylvania is one of several Democrats calling for a 10 percent tax cut for small businesses that hire new workers or boost wages.
He says with more than 80 percent of the state’s businesses having fewer than 500 workers, the credit’s effect would be widely felt.
But Joe Rosenberg, a research associate at the nonpartisan Tax Policy Center based in Washington, D.C., says any effect would likely be modest.
“What you’ll also end up doing is just sort of giving tax cuts to businesses that are just growing and would have ordinarily, even in the absence of a credit, increased their payroll,” Rosenberg said.
Casey says the proposal is more focused on small businesses than the proposed 20 percent tax break passed in the Republican-dominated U.S. House several months ago.