House of Representatives Passes $15 BILLION “jobs” bill

Today the House of Representative approved a $15 billion jobs bill consisting of tax credits and highway construction funding. The final vote to incur added billions of dollars on yet another government program was 217 to 201. The House of Representatives state this $15 billion (not including the highway funds portion) will be paid from recouped revenue as a result of cracking down on off shore tax shelters.

The core of the legislation is a payroll tax credit for employers who hire workers who have been jobless for at least two months. Those business owners wouldn't have to pay their 6.25% share of the federal payroll tax for the remainder of 2010. WOW! 6.25% for the remainder of 2010. If the worker is still on the books in a year's time, the employer would receive an additional $1,000 tax break.

Grandpa:
With the number of career politicians in congress spening their adult life running for office versus actually operating a business, I guess it would be too much to expect them to actually perfom some cost analysis in an effort to calculate a projected return on a $15 billion expense.


Attention Congress:

I am the owner of a widget manufacturing business and like many of my peers, business continues to be extremely slow albeit slightly better than this time last year. Unfortunately, I have yet to visualize meaningful data to suggest an increase in new widget orders and when a few new orders arrive, Bill and Mary Jane simply pull a 40 hour week versus 37.5.

CONGRESS, you need to understand that a “saved widget” is really challenging for the private sector to grasp. Unlike you, I comprehend operating statements and a balance sheet and after 30 years in business, my CPA informs me there is no Generally Accepted Accounting Practices for “saved widgets”. She tells me that “if can’t touch it, you can’t count it.

My employed ranks have been cut better than 20% during the prior two years and you are proposing to save me 6.5% of the federal payroll tax for the remainder of 2010. WHY would I hire someone if my new order volume does not justify adding another person?

Allow me to break it down for you as I realize math is not your forte
Let’s say I bring on a $30,000 per year employee. Guess what you congressional box of rocks, I remain 100% responsible for their payroll, worker’s compensation, health care benefits, auto allowance, holiday and sick pay. For the record, I need to maintain labor costs to less than 32% of gross revenue in order for us to make current payroll, feed my family and have a fighting chance for another 30 years.

My current average gross expense (actually calculated by our CPA), is 35% to 38% of wages/salary. At $30,000, my average employee expense above payroll is approximately $875+ per month or $10,500+ annually. This of course assumes our health insurance carrier does raise our premiums by another 20% and that my unemployment insurance does not double.

At $2,500 per month ($30,000 for year) and assuming you in congress actually pass something by 4/1/10, I save approximately $162.50 per month or $1,462.50 for the duration of 2010. In lieu of incurring $875 per month, I now incur $712.50 per month or $6,412.50 for the remainder of calendar 2010. For the record, your added “bonus” of $1,000 a year from now clearly indicates you know zip about running a business.

Hey congress, $30,000 salary plus $6,412.50 in additional employee related exenses equates to $36,412.50. In order for me to have any chance of survival, I need a minimum of $113,790 in new gross revenue just to bring on one person! YOU can’t be serious, as even a 4th grade math student would snicker at this word problem.

One final point:
If you are so confident that you are able to secure almost $15 billion from off shore tax shelters, why not simply "get it on" and apply it to existing debt?