US senator unveils tax credit for jobs

November 14, 2009 10:22:19 AM

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A Democratic US senator on Friday unveiled details of a plan to create a tax credit for businesses that create jobs, as the White House has called a December summit to tackle sky-high unemployment.

Senator Russ Feingold's proposal would establish a tax credit over the next two years for businesses that hire new employees, expand work hours for current employees, or raise worker pay, his office said.

"While there's no easy way to solve the unemployment problem, the jobs tax credit would be a targeted and responsible tool to help businesses hire workers and bring down unemployment," according to Feingold.

The credit would amount to 15 percent of eligible payroll for 2010 and 10 percent in 2011 -- and would exclude pay increases for very highly salaried workers, as well as the wages of firm owners or family members.

The credit would be calculated year-on-year to avoid being triggered by seasonal employment spikes, and would include safeguards against having firms lay off workers now and trigger the credit by hiring them back in 2010.

Feingold says he wants to make sure the credit will be offset in order to have no impact on the soaring US budget deficit.

With unemployment at 10.2 percent, a 26-year high, President Barack Obama on Thursday announced he would hold a jobs forum at the White House in December.

The meeting among chief executives, small business owners, economists, financial experts as well as representatives from labor unions and non-profit groups is to see "how we can work together to create jobs and get this economy moving again," Obama said.

Feingold said he hoped the temporary tax credit he was working on would be among the proposals taken up at the summit.

"While our nation faces serious challenges at home and abroad, creating jobs in this down economy must be a top priority," said Feingold.