How small-business issues are shaping politics and policy.
In a bid to retake the initiative on small-business policy, President Obama Wednesday is expected to propose a 10 percent tax credit tied to new hiring. But the policy appears designed as much to draw a political distinction as to generate new jobs. In describing the proposal, which Mr. Obama will flesh out in a visit to a Washington-area small business, the administration drew a sharp contrast with a Republican small-business tax cut that passed the House last month, which the White House contends is too tilted toward the wealthy.
Under the White House proposal, which the president previewed in a video address over the weekend, a company would get credit against income taxes worth up to 10 percent of the increase in total wages in 2012, which could come either in the form of salaries for new hires or raises. A company that increased its payroll by $4 million would see a $400,000 income tax credit.
The tax credit is capped at $500,000 to make it more valuable to smaller companies. And the White House specifically targets middle-income earners by limiting the proposal to the top wage that is subject to Social Security tax, $110,100. “Unlike the House Republican proposal,” the White House said in a news release
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