OK, one more question for small business owners here

Does a tax credit for hiring really help? Never? Sometimes, depending? A great thing to do usually?

It would seem right offhand that what businesses need more than anything is customers with discretionary income. If they have that, then what is the point of giving credits to hire the people they'd hire anyway because there is a reasonable expectation of a profit from selling stuff to people who have the money to buy it? Sounds like nothing but bonus points for being lucky, when government money would be better spent on green jobs which pay well enough give a new class of workers money to spend.

It's sort of like a sale at a department store. They mark an item 'down' and try and convince you that you're saving money by spending it.

That's a tax credit, in my opinion.

There are two things that effect my willingness to hire people:

1. My take home pay.

2. The hassle of having employees/ having a business.


On #1, I need to make a certain amount of money. Once I have made that, I am not greedy and I am willing to hire people so that I have more free time for kids, hobbies, etc. Were my taxes to go up significantly, I would have to work more, which I would do by laying people off. Sorry folks, but that's the way it is.

#2 is actually pretty huge.. takes lot's of the joy out of having your own business. Having employees blows.. endless reams of paperwork to deal with, to the point that you need to hire someone just to deal with it all. Small tax credits make no difference, in part because its one more complicated thing to deal with. This includes health insurance, by the way. National health insurance would make me a lot more willing to hire people so that I don't have to hear people endlessly bitch about this or that thing being out-of-network, etc. It's such an amazing pain in the ass that you wouldn't believe it.

I outsource a huge amount of stuff, not for cost reasons, but to keep my employees as few as possible because of #2.

I chuckle at the whole tax credit for hiring people thing. I can't imagine very few small businessmen are suddenly going to hire people because of it.

Once you are a small businessman, you tend to start hanging around other small businessmen, and most that I know would agree with what I wrote above.

Big business also likes complicated rules and programs for dealing with the government because they have endless lawyers and accountants on staff already, and so they can worry less about people like me because I am too busy trying to figure out how to interface with my own government to better figure out how to compete with big business.

that is one of the things I have been trying to teach people here, to no avail.

They're a soft-hearted bunch on most issues, but not on that one.

My husband and I both run our own separate small businesses. I completely agree that hiring employees is very much affected by

1. how much we're making

2. the hassle of hiring employees

In my practice, I have several small businesses as clients. I think those that already have more than a few employees might be induced by a large enough tax cut to hire one more, IF of course they're making enough money to support it. I also think that it might be more attractive to the small businesses that are already outsourcing their HR stuff to companies like administaff and the like.

For those reasons, I think that a large tax credit would become more attractive depending on the number of employees a business already has. If you're talking about a small business with dozens of employees (as opposed to just a handful), the tax would probably be seriously looked at.

which can be particularly onerous and a big impediment to hiring for small business owners.

tax credits for hiring help push those businesses that have been thinking about it to do it. Other than that the single best thing the government could do to spur small business growth would be to quit injecting uncertainty into the market.

I have been thinking about hiring for a while, but I can't do it because my margins are tight, and I have no idea what my labor costs will be a year from now with all the new spending, and regulation being bantered about in Congress now.

For example, health insurance, if I am mandated to provide that for my employees that almost doubles my labor cost! a family plan on a group policy for my workers will cost me $1,200/mo. All of my employees are part time, holding other jobs, and they average about $1,600/month working for me, to add another $1,200 to that means that I can not meet my contracts with my customers.

It's a commitment to hire an employee. No one is going to go through the administrative hassles for someone who's going to be around for only 6 months then have to be laid off because business cycled down temporarily. It's so much easier hiring people for short periods or on project bases as needed.

And this exacerbates the unemployment problem

--but just paying a payroll tax on any payroll above $200,000?

to the quality of service I provide. As a business owner I will spend anything i have to improve either the quality of my service, or the efficiency of it's delivery, but I don't like bureaucratically imposed costs that do nothing to feed either of those two objectives.

What if you wanted to keep someone who all of a sudden had serious medical problems, and your health care assessment was guaranteed to NOT change at all if that happened?

to pay that assessment. And please do not believe the government when they tell you it is only $100M per yr. I almost choked when I heard the President say that yesterday. That was a flat out lie. In Mass. Romney passed an almost universal health care system a few years ago. It is a disaster. Our uninsured rate in MA. prior was about 6% of the population, now it is about 3%. That is the only good thing. We have some of the highest premiums in the country, and they have grown faster under this system as more people flock to get their "free care". Costs have sky rocketed, and no Gov. Patrick is talking about cutting care, to reduce costs which are bankrupting the state. Obama's plan is similar, and that does not bode well.

The Senate bill only gets to $1TRILLION by including 10 years of tax increases, plus a $500BILLION cut to Medicare(too bad seniors), and a 22% cut in medicare reimbursements(which Congress has refused to do the last 4 times, and is not likely to do this time either) to offset 6 years of service.

The MA. plan is already DOUBLE the amount budgeted for 11 years from now! The FED program can not work any better.

So I already don't have the money to pay whatever assessment they are likely to give, and it can only increase from there.

I am absolutely NOT a supporter of the MA plan or the Senate plan. I was thinking more along the lines of single payer, where a payroll tax on just payroll (not net profits, not gross receipts, not inventory) over $150,000 of 8% would be assessed. That would mean if you had only three employees salaried at $50,000 a year each, there would be no tax for you at all. That would mean $28K would be all you would pay on a $500.000 payroll, and everyone would be covered. Individuals would pay a $100-$125/adult/month assessment in addition to that, subsidized for those with low enough incomes. Would that work for you?

Workman's comp, next to payroll itself is my biggest single expense. With National Health Care that expense would be eliminated..

I agree it should, but I havent heard or read that in any of the bills

Business (small or big) will hire when they need the labor.
They will need the labor when demand rises.

Hiring somebody you don't need for a tax credit is a good way to go out of business.

Say you make widgets. You got 5 employees and they can make 2000 widgets a month.
Orders are 1800 (excess labor of 200 widgets). Likely you keep everyone on board hoping things get better.

Orders drop to 1100. You have to layoff someone.
A stupid tax credit is not going to make you hire someone back.
Orders going back up will.

Say orders rise to 1600. You are still worried so you don't hire an employee back but you offer overtime so all the widgets get made.

Orders keep climbing 2000, 2100, 2200. Now at this point all your workers are working full speed, you are paying 20+ hours of overtime they are complaining. You have no choice. You need more labor. So you hire 2 more employees (6 total and you capacity just grew to 2400).

Business hires labor when they are needed.
Business fires labor when they are not needed.

Tax credit is worthless. Demand needs to rise.

Glad to hear it from people with actual experience.

Is nothing more than a taxpayer funded give-away directed towards people who don't need help. It also puts businesses that can't afford to hire at an additional competitive disadvantage.

Sometimes it seems like Washington is deliberately trying to kill small business. I guess we don't hand out enough campaign donations.

as being a serious detriment for small business owners.

Can you pinpoint a time (legislation, event) when the hiring process became such a larger burden on your time/attention?

Can you point to a specific event, law or societal expectation/change that significantly altered your ease and/or ability to hire?

If any of the above are valid issues that you've had to deal with, have you been able to discern that, while burdensome and tedious, such elements have provided you with superior employees?

Considering the best employees you've had in the past, would current hiring burdens disqualify them if they were applying for a job with you today?

Besides being able (or being required, or having incentive) to offering health coverage to your employees, are you required to have involvement in personal medical details of an employee if coverage for a particular procedure or treatment is being disputed? Are you comfortable with this level of involvement if it exists? If it does exist, are you confident in the security and privacy of all pertinent records of such medical issues - that they are securely and confidentially placed so that there is no possible means of access to any unauthorized person? How many are authorized? Have they undergone specific screening related to the handling of confidential, personal, medical information? Have you?

Please accept my apologies - i don't mean to beat up on you... but I am aghast at the lack of oversight/regulation regarding employee health/medical information and lack of employer requirements - that I assume provide more burden to the employer than anything else. You're required to keep medical records "separately, in a secure place". In the hands of several unethical, dishonest employers I've had in the past, that vague 'suggestion' is a frightening prospect at best.

Beyond that, I'm most interested in what, if anything, has made hiring more difficult... beyond citing "more paperwork" or that it's just a pain.

Guessing you're too busy to answer, but i figured i'd give it a shot. : )