SCHUMER: NEW HIRE NOW TAX BREAK JUST SIGNED BY PRESIDENT COULD CREATE TENS OF THOUSANDS OF JOBS IN NEW YORK METRO AREA, URGES EMPLOYERS TO START HIRIN

Schumer, Labor Commissioner to Stand With 3

NYC Businesses Who Will Hire Workers Using Tax Break

All NYC Businesses, Large and Small, Can Benefit

Under Tax Break: Unemployment Still

Unacceptably High in NY

Most Small Businesses Don't Know New Tax Break

Has Taken Effect - It's Simple, It's Easy, and Could Put

Tens of Thousands of NY'ers Back to Work

Today, U.S. Senator Charles E. Schumer and New York State Department of Labor Commissioner Colleen C. Gardner urged New York City area businesses to take advantage of his “Hire Now Tax Cut” proposal that now provides businesses that hire unemployed workers a critical tax break. The plan was signed in to law by the President last month and is now available to be taken advantage of. Under the plan, businesses can now avoid paying the employer’s share of Social Security taxes on that worker for the duration of 2010. The more a business pays a worker (up to the maximum Social Security wage of $106,800), and the longer a business has a worker on its payroll, the greater the tax benefit – so there is an incentive to hire people sooner, and pay them more.

“Both sides of the aisle have heard the call to focus on jobs,” said Schumer. “This proposal is not a panacea, but it will start the long process of putting people back to work, and I hope it will also be the crack in partisan dam that has caused so much gridlock in Washington.”

State Labor Commissioner Colleen C. Gardner said, “In this recession, New Yorkers are collecting unemployment benefits more than twice as long as they would under normal circumstances. I hear it from jobseekers all the time – they are looking at job postings, applying for jobs, enrolling in training but still can’t find work. My message to employers is clear. If you hire a long-term unemployed jobseeker you will receive thousands of dollars in tax breaks – not next year, but immediately. We have a responsibility to get our state’s businesses growing again and New York’s unemployed back to work. That’s what the HIRE Act will do. ”

Schumer and Gardner said the plan had the following advantages and benefits:

· Simple. The Schumer-Hatch idea is easy to explain and administer: “No employer payroll taxes on unemployed workers hired in 2010.” Since the proposal is for a complete elimination of the 6.2 percent payroll tax for eligible workers, rather than a fixed or capped dollar amount, employers will know to simply zero out the tax for eligible workers.
· Focused. Given our budgetary constraints and the nagging problem of long-term unemployment, any employment incentive should be focused on the hiring of workers who are currently unemployed. Only by focusing on the unemployed can we get people off the unemployment rolls at an affordable cost to taxpayers. Plus, unlike some versions of a payroll tax holiday, this proposal is not biased towards either low-wage or high-wage workers. Under the Schumer-Hatch plan, a business saves 6.2 percent on both a $40,000 worker and a $90,000 worker.
· Front-Loaded. The credit provides an incentive for businesses to hire workers earlier in the year, because the tax benefit will be greater. A $60,000 worker hired in April will save a business about $3,000 in taxes.
· Immediate. In the current environment, no business wants to wait until next quarter or next year to receive a tax credit. Our proposal puts money into a business' pockets immediately, since the tax is simply not collected in the first place.
· Affordable. The Joint Committee on Taxation estimates that this provision will cost $13 billion, a far lower cost than other proposals that are not focused on the unemployed, or that would give a credit based on any increase in payroll.
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The payroll tax reduction will be for private-sector jobs only, although nonprofit organizations and state institutions of higher education would be eligible; new jobs that are created by tax dollars in the first place would not be eligible. An employer cannot receive the benefit for hiring someone to replace an existing worker, unless that worker left voluntarily or for cause. To reduce double-dipping, an employer would also have to choose whether they wanted an employee to be eligible for the payroll tax relief or the work opportunity tax credit (WOTC), but not both. Finally, to promote long term employment, the plan also adds the following bonus: For any eligible employee kept on payroll for a continuous 52 weeks, the employer would receive an additional $1,000 credit on its 2011 tax return

Schumer and Gardner offered the following examples of savings that businesses would receive under this proposal:

· Hire a $35,000 worker in April, save $1,808.
· Hire an $80,000 worker in May, save $3,720.
· Hire a $70,000 worker in June, save $2,893.

Schumer and Gardner said that close to 849,000 people in New York are eligible to be hired by businesses who take advantage of the Schumer-Hatch program.

· In Long Island, about 102,000 people will be eligible to be hired under this tax cut.
· In New York City, about 415,000 people will be eligible to be hired under this tax cut.

Schumer added, “This is a win-win-win: it is a win for businesses, a win for the economy, and a win for job creation.