U.S. Sen. Charles Schumer (D-N.Y.) on Wednesday said he is urging a six-month extension of a federal business tax incentive under the HIRE Act, because it could benefit as many as 300,000 unemployed workers in New York State — including about 76,000 on Long Island.
The program is set to end at the end of this year. Schumer wants it to continue through the first six months of 2011, he said in a conference call.
The continued tax break is “not a panacea,” but is needed, Schumer said, in part because “too many Long Islanders are struggling to make ends meet."
Speaking of a hypothetical employer named “Joe the Butcher,” Schumer said the incentives alone wouldn’t be enough to induce Joe to hire if he’s not getting more orders for meat. But, Schumer said, “If he's thinking of hiring someone this will push him over the top.”
The program, signed into law by President Barack Obama in March, gives a tax exemption to businesses that hire people who had been jobless for the 60 days before beginning work. The exemption spares them from paying the 6.2 percent Social Security payroll tax through December. Employers could also claim a $1,000 tax credit for each worker retained on the payroll for at least 52 weeks straight.
Businesses nationwide have benefitted from tax incentives for hiring 4.5 million workers. The new workers were added from February to May, according to the Treasury, and the businesses that hired them are expected to save $8.5 billion in taxes. However, the Treasury report did not estimate how many of those jobs would have been added anyway, without the tax break.
This week, Long Island business owners told Newsday that the tax break was not a strong incentive, and said they hire when demand for their goods and services makes adding workers profitable.
Schumer said that, of the 4.5 million eligible workers hired during the program so far, many would have been hired anyway but, in the absence of the HIRE Act, “many of them would not.”
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