This jobs bill was made particularly unpopular to most Republicans after Senate leadership changed the funding mechanism to a “millionaire surtax.” Basically, this millionaire surtax would have required individuals to pay an additional 5.6-percent surtax on incomes in excess of $1,000,000, raising $450 billion over 10 years. As originally proposed, this legislation would have been funded by reducing the itemized deduction allowance for individuals earning more than $200,000 and families earning more than $250,000 (only 28 percent of the total itemized deductions would have been allowed as a deduction).
Even though the bill as a whole has stalled, many expect Senate Democrats will repackage a number of its provisions on which bi-partisan support could be rallied. However, even the most popular provisions contained in this legislation could certainly fall hostage to the continuing political stalemate.
Some of the provisions that would have benefitted small businesses include:
- Provide a 50-percent reduction in payroll taxes for the first $5 million in wages.
- Eliminate employer payroll taxes for small businesses that create jobs or give a wage increase from the prior year.
- Extend the section 179 deduction through 2012.
- Establish a tax credit for hiring unemployed veterans or the long-term unemployed.
So, in view of the continuing legislative impasse, passage of measures that are clearly bi-partisan remain politically uncertain.
