Washington, DC – After hearing from small business owners about how we can get our economy moving, U.S. Senator Sheldon Whitehouse (D-RI) today introduced the Job Creation Tax Credit Act to offer tax incentives to help businesses expand their workforce. On Monday, Whitehouse announced the legislation while touring TEDCO, Inc., a manufacturing business in Cranston, RI which had been forced to downsize during the recession but is hoping to expand once again.
“I hope that my colleagues on both sides of the aisle will support the Job Creation Tax Credit Act, because too many unemployed Americans are hurting,” said Whitehouse during his statement on the Senate floor. “Too many of them are out of work through no fault of their own and are struggling to make ends meet. We must continue fighting for them by using every tool at our disposal, including new tax incentives, to get our economy moving and help businesses start hiring.”
Expanding on the HIRE Act of 2010, the Job Creation Tax Credit Act would offer a new set of tax incentives for hiring in 2011 and 2012. If passed, the bill would provide businesses refundable tax credits of 15% of wages paid in 2011 and 10% of wages paid in 2012 for qualified new hires – those who have been unemployed for at least 60 days. The refundable nature of the credit means that struggling businesses can benefit from it even if they aren’t currently making profits.
Earlier this year Whitehouse unveiled his “Making It in Rhode Island” plan to support manufacturing jobs. The Job Creation Tax Credit Act will complement that broader plan.
The text of Whitehouse’s remarks, as prepared for delivery, is below.
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Thank you, Madam President. With the unemployment rate hovering above 9% nationwide and at almost 11% in Rhode Island, job creation must continue to be our number one priority as lawmakers.
It disappoints me that Republicans chose politics over job creation yesterday when they filibustered legislation that would have reauthorized the Economic Development Administration – an agency dedicated to restoring economically-distressed regions to prosperity. This is the fourth jobs bill that the minority has chosen to obstruct, and I hope my colleagues on the other side of the aisle will reconsider their tactics. Out-of-work Americans are hurting right now, and they want us to act to help create jobs.
I rise today to introduce a measure that would do just that. I’ve heard from dozens of Rhode Island business owners that business may be picking up a bit, but that their concern that the recovery may be temporary discourages them from hiring additional workers.
I spoke with one such small business owner – Dona [pronounced Donna] Vincent – during a tour of her Cranston, Rhode Island company this past Monday. Tedco, which makes and stamps metal components for the automotive, aerospace, and communications industries, employed 13 people before the recession hit in 2008. Now down to just eight employees, Dona and Tedco’s General Manager Barbara Gallonio would like to start hiring more workers, but worry that business could slow again. They told me they’ve been waiting for months, saying “what if, what if.”
The legislation I’ve introduced today – the Job Creation Tax Credit Act of 2011 – would give Dona and thousands of other business owners nationwide greater security in building their workforces. The bill would provide refundable tax credits for employers to hire new workers now. For each qualified hire made in 2011, the business would receive a tax credit equal to 15% of the wages paid to the new employee. If the new employee remains employed, or if the business hires additional employees in 2012, it would be eligible for a 10% tax credit equal to those employees’ wages next year.
The tax credits would be refundable, meaning that businesses would benefit from them even if they are not currently profitable. The higher credit in 2011 would encourage employers to hire new workers as soon as possible, and the additional credit in 2012 would encourage employee retention and additional workforce expansion. To help those Americans struggling to find work, “qualified hires” would be any new employees who have been unemployed for at least 60 days prior to getting hired.
The Job Creation Tax Credit Act would continue the job creation sparked by the HIRE Act of 2010, which included somewhat different tax incentives for new hiring. Economist Mark Zandi has estimated that the HIRE Act created 250,000 new jobs, and the larger financial incentives in this new bill would continue to dent the unemployment numbers in Rhode Island and nationwide.
The HIRE Act, sponsored by Senators Schumer and Hatch, received wide bipartisan support, and I hope that my colleagues on both sides of the aisle will support the Job Creation Tax Credit Act as well, because too may unemployed Americans are hurting. Too many of them are out of work through no fault of their own and are struggling to make ends meet. We must continue fighting for them by using every tool at our disposal, including new tax incentives, to get our economy moving and help businesses start hiring. I thank the chair and I yield the floor.
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