Last week, Congressman Ben Chandler cast a vote in favor of H.R. 2847, the Hiring Incentives to Restore Employment (HIRE) Act. This legislation will provide assistance to small businesses to hire and retain new employees, strengthening small businesses and creating jobs for out-of-work Kentuckians.
Chandler said in a speech on the House floor: “Small businesses are the backbone of our economy and the engines of job creation. Investing in the long-term health of our small businesses is one of the surest ways to economic recovery. This legislation isn’t just about small businesses though, it is about helping that mom, that dad, who was laid off in the midst of this recession find a good-paying, local job. A vote for this legislation is vote for middle-class families, for small, innovative start-ups, and the long-term economic health of Central Kentucky and the nation.”
The HIRE Act will provide a payroll tax holiday for small businesses that hire previously unemployed workers, will offer an income tax credit of $1,000 for businesses that retain these employees, and will reform the way business expenditures are written-off.
According to Commerce Lexington, out of the 12,020 companies in the Lexington area—including Bourbon, Clark, Fayette, Jessamine, Scott, and Woodford Counties—11,670 (97percent) are small businesses, employing less than 100 employees. The Small Business Administration (SBA) also noted that small businesses contribute significantly to the US GDP. In fact, in a 2007 study, small businesses were found to produce approximately 50 percent of the nation’s private, nonfarm GDP.
Under the HIRE Act, businesses who hire new employees will be exempt from paying the employer share of Social Security employment taxes (6.2 percent of the first $106,800 of wages) for wages paid in 2010. Another provision in the bill will provide a $1,000 income tax credit for every new employee they continue to employ for 52 weeks, helping small businesses retain these new hires. To receive these incentives, eligible employees must be previously unemployed, hired between February 3, 2010 and January 1, 2011, and must not replace an existing employee.
The HIRE Act, which will not add to the federal deficit, passed the House today by a vote of 217-201 and now awaits consideration from the Senate.
“The HIRE Act will help our small businesses heal during these tough economic times and help unemployed Kentuckians find good, local jobs,” Chandler said. “The unemployment rate is around 11 percent in the Commonwealth of Kentucky, and we have to do all we can to create jobs. The most important thing right now is putting people to work, and this bill helps us do just that.”