President Obama has submitted legislation to Congress designed to encourage American small businesses to hire new workers and expand operations. The $447 billion plan includes cutting the payroll tax in half for American companies on the first $5 million in payroll. The bill would also provide a complete payroll tax holiday for businesses that add new workers or increase the wages of current workers (up to the first $50 million in payroll). Companies that hire long-term unemployed workers would be provided a $4,000 tax credit.
The bill would extend the current provision, which allows companies to expense most newly purchased assets over one year as opposed to depreciating it over multiple years. Among many other provisions, the plan would also create a National Infrastructure Bank to finance highway, rail and airport construction projects. The Obama Administration proposes to pay for the so-called “American Jobs Act” by limiting tax deductions for individuals making more than $200,000 a year and families earning more than $250,000. Congress has begun considering the bill.
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