Small businesses would catch a small tax break if they hire, under legislation approved by the House and heading to the Senate.
Under the bill, businesses could claim a $10,000 state income tax deduction for each job added that pays at least the average county wage. The tax break would double if the business pays half of the worker’s health care benefit. The resulting $600-to-$1,200 tax break isn’t enough of an incentive to spur business to hire say some critics.
“This is not an incentive for business to create a new job,” Rep. Jill Schupp (D-Creve Coeur) tells colleagues. “This is a bill about headlines. This is sprinkling fairy dust over a problem. This is imaginary, not real.”
Others agree, claiming majority Republicans in the House want the public to believe they are attempting to spur job growth while the incentives are too small to do so.
Conceding the point a bit is sponsor Denny Hoskins, a Republican from Warrensburg, who agrees the tax break likely won’t motivate a business to hire.
“However, I think this is part of the puzzle,” responds Hoskins. “It’s part of the puzzle for the small businesses that may be teetering on the decision to hire an extra employee. Six hundred dollars could mean a lot or the $1,200 if they offer health care to that employee.”
Other critics focus on the cost of HCS/HB 45, estimated to cost state general revenue approximately $224,000 next year and as much as $301,000 the following year. Supporters contend that changes made during debate on the House floor will more than make up for the lost revenue and that adding jobs will boost the tax revenue taken in by the state.
The bill moves to the Senate on the strength of a 136-to-21 vote.