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That could be why support is building among Republicans and Democrats in Congress for a tax credit for companies that create new jobs. It's been done before--in 1977-78--to boost employment following 1973-75 recession--and the thinking by economists and politicians who want to help their unemployed constituents is that it can work even better this time around because it would be put into play closer to the bottom of the recession.
One possible version, The New York Times reports, would give employers a two-year tax credit if they increased the size of their work force or turned part-time jobs into full-time jobs. The credit would be worth twice the first-year payroll tax for each new hire, amounting to several thousand dollars, depending on the new employee’s salary.
By defraying the cost of hiring a new employee, or expanding an existing employee's hours, a credit like this wouldn't compel employers to take on the expense of hiring employees if the need weren't there for them or if they didn't think that the work they do would bring in more business and more revenue. In theory, it would give employers just enough of a savings incentive to make the leap to hire. Clearly, it wouldn't work for all businesses, and it will not be popular with legislators and voters already worried about a mounting deficit, but the fact that it's got support among members of both parties indicates this may actually be passed relatively quickly.
Do you think tax credits for hiring are a good idea?
