President Barack Obama's proposal to offer small businesses tax credits for adding staff and expanding work hours received mixed reviews Friday from entrepreneurs on Long Island.
Some said they would use the incentives to boost staff. Others said they won't hire until the economy improves.
For Trace Feinstein, president of E-Scrap Destruction in Islandia, an electronics recycling company with nine employees, the timing could be just right if Congress approves the president's "Small Business Jobs and Wage Tax Cut." He was considering hiring two employees but said he is likely to increase that number now.
"With incentives, we would likely add a couple more than we thought," he said. "At the same time I would give my employees extra hours."
But Jack Bloom, president of the printing company Sir Speedy of Westbury, is waiting for a bigger incentive: an improved economy.
"How could someone just hire someone to get the tax credit if they don't need them?" Bloom said. "The business has to come first."
Obama proposed the incentives in his State of the Union address on Wednesday, and on Thursday evening the White House released the details. Under the proposal, businesses would receive a $5,000 tax credit for new hires, an amount capped at $500,000. Start-up business would be eligible for half those amounts. In addition, small businesses that increase the hours of existing employees or their wages beyond inflation would receive a 6.2 percent tax credit for the reimbursement of Social Security payroll levies.
The White House puts the programs' costs at $33 billion.
The Island could certainly use hiring incentives. Last month the local economy logged its 16th month of job losses.
When Maryellen Ruvolo, the president of PharmStorm, an East Islip-based online resume-posting service for the pharmaceutical industry, heard about the proposal, she asked her accountant to see if she could take advantage of it to add to the seven-person staff of the new company.
"Any tax breaks we can get for start-ups we are looking to use," she said. Her company began operating on Jan 1.
Gina Slater Parker, president of Hempstead-based Black Women Enterprises, a technical-support program, applauded the proposal but also stressed that businesses need help with more immediate concerns such as higher taxes and tighter credit.
"It sounds good, and that's because small business has been neglected in his first year," she said. "But it's not an immediate fix. It's a longer-term gesture."