[Congressional Record Volume 156, Number 10 (Tuesday, January 26, 2010)]
[Senate]
[Pages S254-S255]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FEINGOLD:
  S. 2955. A bill to amend the Internal Revenue Code of 1986 to provide 
a temporary payroll increase tax credit for certain employers; to the 
Committee on Finance.
  Mr. FEINGOLD. Mr. President, I am pleased to introduce legislation 
establishing a temporary jobs tax credit to help businesses expand 
their payroll here in the U.S. by hiring more employees, expanding work 
hours, or raising pay. The measure is modeled on a proposal by the 
Economic Policy Institute that would create an estimated 5 million jobs 
over the next two years.

[[Page S255]]

As we should not undermine the long-term prospects of our economy for 
the sake of a short-term problem, the legislation is fully offset to 
ensure that over the next 10 years it will not increase the deficit.
  Briefly, the legislation provides firms a tax credit of 15 percent of 
the increase in their eligible payroll in 2010, and 10 percent in 2011. 
Eligible payroll includes that portion of a firm's wages subject to 
Social Security taxes. For 2010 those are wages of $106,800 or less. 
Thus, pay hikes for very highly salaried workers would not be eligible 
for the tax credit.
  The jobs tax credit is designed to avoid seasonal employment spikes 
by calculating it on a quarter over-year-ago-quarter basis. For 
example, wages for the first quarter of 2010 are compared with wages 
for the first quarter of 2009; wages for the third quarter of 2010 are 
compared with wages for the third quarter of 2009. To limit possible 
gaming of the credit the last quarter of 2010 would be measured against 
the last quarter of 2008, rather than 2009.
  Only increased wages for employees here in the U.S. would be eligible 
for the credit.
  President Obama was handed the worst economy since the Great 
Depression. While he has taken significant steps to turn the economy 
around, employment continues to be a problem.
  The official unemployment rate is a tragically high 10 percent. But 
even that high level understates the true employment picture, for if 
one adds in the millions of people working part-time who want full-time 
employment, and the millions more who are discouraged and have given up 
looking for work, the rate is 17.3 percent, one of the highest levels 
since 1994.
  We must take steps to help businesses put people back to work and 
this bill will do that.
  No tax credit can be perfectly targeted. Any tax incentive we provide 
firms will provide some businesses with a windfall for behaving in ways 
they would have anyway, but a recent report by the Congressional Budget 
Office on various policy options to spur employment found that a tax 
break similar to this proposal would be among the most efficient and 
effective policies we could enact. The CBO report estimated a similar 
jobs tax credit would boost Gross Domestic Product by as much as $1.30 
for every dollar spent, and would increase employment by as much as 18 
net full-time equivalent jobs for every million dollars invested 
through the credit. In laying out the jobs tax credit proposal on which 
this measure is based, the Economic Policy Institute projected an 
increase of more than 5 million jobs over the next 2 years.
  As I noted earlier, it is essential that we not aggravate the long-
term problems facing our economy, and for that reason my legislation 
includes provisions that will offset the estimated cost of the jobs tax 
credit, which the Economic Policy Institute estimates to be $27 
billion. Specifically, the proposal includes provisions originally 
proposed by the Senator from Michigan, Mr. Levin, in S. 506, the Stop 
Tax Haven Abuse Act.
  Under the leadership of Senator Levin, the Homeland Security 
Committee's Permanent Subcommittee on Investigations found that 
offshore tax evasion costs the taxpayers of this country an estimated 
one hundred billion dollars every year. Because of this abuse, ordinary 
taxpayers are bearing more than their fair share of the cost of their 
government, and our children and grandchildren will be paying an even 
bigger bill for the increased deficits and debt that result from this 
practice.
  The legislation Senator Levin developed as a result of his 
Subcommittee's work would go a long way to shutting down this abuse, 
and I am pleased to include it in a measure to help firms put people 
back to work.
  The economic pain caused by the current recession is real. More than 
fifteen million people are considered officially unemployed today, and 
if we include those who want to work more hours and those who have 
given up looking for work, that number rises to over 26 million. As we 
know, losing one's job means more than losing income. It is one of the 
most traumatic events we can experience, and can be devastating for the 
millions of families that have been affected.
  We must take action to address this employment crisis. As the Senate 
begins to debate possible responses, a jobs tax credit should be at the 
top of the proposals we consider. While the precise terms of such a 
credit can be debated, the need for it is clear.
  I urge my colleagues to support this approach.
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