White House Proposes Small Business Wage Incentive

The White House has renewed its call for legislation intended to stimulate small business job growth. This proposal would provide a 10 percent tax credit for “new payroll” of up to $500,000 beginning in 2013. Incremental payroll of up to $500,000 would qualify for the tax credit, translating into a maximum credit of $50,000 per employer. A similar provision was included in the president’s budget last year and was also picked up in S. 2237; the Small Business Jobs and Tax Relief Act. That bill failed to pass the Senate last July.

Turning to another wage-related tax incentive, the White House has so far failed to endorse extension of the 2 percent payroll tax cut for individuals; this provision expires at the end of this year. Last year, CompTIA’s call for this 2 percent payroll tax reduction to be extended to employers failed, as the administration’s focus was to get money into the hands of workers. Now, it seems the White House might be shifting its focus to encourage greater wages growth aimed at lowing the unemployment rate.