The American Jobs Act

The national unemployment rate is approximately 9.1 percent (9.1%).  The unemployment rate for the African-American community is worst, as it is approximately16.1 percent (16.1%).  Approximately 6 million Americans have been jobless for 27 weeks or more. 

President Obama took steps last night to address this pressing issue by introducing the American Jobs Act.  According to the White House, the proposed legislation will get Americans back to work by: (1) giving tax breaks for hiring; (2) pathways back to work; (3) rebuilding and modernizing American infrastructure; and (4) providing tax relief for every American worker and family.  The plan is bipartisan in nature and I hope Congress considers passing it or drafting legislation to get America back to work.  As Obama said in his speech, the next election cycle is 14 months away, and we cannot afford to wait until then to act. We have to act now.

Tax Breaks for Hiring

Obama’s plan calls for tax cuts for small businesses when they hire new workers and increase wages for existing workers.  Additionally, the government will cut payroll taxes in half, and small business can deduct 100% of their business investments.

I am happy to see Obama finally link tax cuts to tangible job creation, i.e. you hire and you receive a tax break.  It is a simple concept because both the employer and new hire benefit.  I shared a similar concept with Dr. Smiles last week.  I did not think of connecting it with wage increases, but I like it because it gives employers an incentive to combat stagnant wages.  Now, can we get Obama to propose a living wage law?

Pathway Back to Work

Obama’s proposed legislation provides a $5,600.00 tax credit for any business that hires any of the 877,000 unemployed veterans, or a $9,600.00 tax credit if you hire a veteran with a service-connected disability.  Additionally, if a firm hires one of the 6 million long-term unemployed, then it will receive a $4,000.00 bonus tax credit.

It is good to see the State of Georgia leading the pack on policies to bridge the game to re-employment.  I like these proposals because it removes the stigma associated with being “long-term unemployed”; however, I do wonder will it lead to businesses no longer hiring “short-term unemployed” workers so they can maximize the tax benefit.

Rebuilding and Modernizing American Infrastructure

Obama’s plan advocates using the approximately 2 million unemployed construction workers to repair America’s public schools and colleges, and the 3.9 million miles of road, 120,000 miles of railroads, 250,000 mile of waterways, 5,000 airports, and 300 ports.  He hopes to accomplish the feat by creating the National Infrastructure Bank, where entities can apply for loans and loan guarantees, provided they can answer two simple questions – is the project needed and will the project help the economy?

Providing Tax Relief for Every American

Obama’s plan proposes that we increase the payroll tax cut for employees from 2 percent (2%) to 3.1 percent (3.1%).  By doing this, the 160 million working Americans will pocket an extra $500.00.

More money in your pocket after two weeks of work is always good.