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US Senators Unveil Job Creation Tax Cut Bill

Friday, February 12, 2010

A bipartisan measure has been introduced in the United States Senate to provide a payroll tax cut for business that hire individuals who have been unemployed for more than 60 days.

According to New York Democrat Sen. Charles Schumer and Utah Republican Orrin Hatch, the co-sponsors of the bill, the 'Hire Now Tax Cut Act of 2010,' would allow any private-sector employer, including a nonprofit organization, that hires a qualifying worker to forgo paying the 6.2% employer’s share of the Social Security payroll tax on that employee for the remainder of 2010.

The Senators claim that the legislation would provide an immediate benefit for companies who hire qualifying workers because they would not have to wait a year to claim the tax savings in the form of a tax credit.

As an additional incentive, however, employers can claim a tax credit of USD1,000 for any qualifying worker hired under this initiative that the employer keeps on payroll for a continuous 52 weeks. The idea behind the proposal is that the more a business pays a worker (up to the maximum Social Security wage of USD106,800), and the longer a business has a worker on its payroll, the greater the tax benefit.

In order to be eligible, the employee’s pay in the second 26-week period must be at least 80% of the pay in the first 26-week period. Workers hired after the date of introduction (February 2) are eligible for the payroll tax forgiveness and the retention bonus, but only wages paid after the date of enactment receive the exemption from payroll taxes.

Hatch says that a company employing a qualifying worker on an annual salary of USD50,000 on March 1, 2010, would save USD2,583 in tax. Hiring a worker on a salary of USD90,000 on April 1, 2010 would save the employer USD4,185.

However, for workers that would otherwise be eligible for the Work Opportunity Tax Credit (WOTC), the employer must select one benefit or the other for 2010 to prevent employers "double-dipping" the two schemes. The WOTC allows employers to claim back 40% of the first USD6,000 of wages paid to employees of one of 11 targeted groups.

Hatch argued that the proposals represent an "affordable, effective and targeted" way to reduce unemployment in the US.

“As a conservative, I appreciate that this proposal isn’t about more and more government spending; it’s about tax relief to get employers hiring again, which is exactly what millions of unemployed Americans most desperately need," he said.

The legislation, according to Schumer, has widespread bipartisan support in Congress, and is also backed by the White House as well as businesses.

“Congress must focus like a laser on job creation, and that’s what this proposal does,” said Schumer. "This bipartisan proposal will put people back to work right away and help create the only thing that will finally bring us out of this recession: Job growth.”

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Offshore Trusts Guide: Introduction

The History of Offshore Trusts
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What Future for the Trust?
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The Swiss Association of Trust Companies
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Offshore Trusts Guide: Jurisdictions

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British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
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British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

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Cyprus: Supervision, Licensing and Tax

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Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

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Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

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Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
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Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
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Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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