NEW WINDSOR, N.Y., July 12 (UPI) -- Eliminating payroll taxes for businesses that hire the long-term unemployed is key to reviving the U.S. economy, U.S. Sen. Charles Schumer, D-N.Y., said Monday.
The temporary payroll tax holiday, which Schumer proposed with U.S. Sen. Orrin Hatch, R-Utah, would apply to any business of any size that hires someone unemployed for more than 60 days, Schumer told the Orange County (N.Y.) Chamber of Commerce.
Governments usually create tax holidays as incentives for business investment. The taxes most commonly reduced are sales taxes, but in developing countries governments sometimes reduce or eliminate corporate taxes to attract foreign direct investment or to stimulate growth in selected industries.
Schumer told the chamber the U.S. economy was no longer going downward but remained flat and that the temporary payroll tax holiday would help it get moving upward again.
Some 3 million people would likely be hired as a result of the payroll tax holiday, Schumer said, calling its cost a "relatively modest" $15 billion compared with the $800 billion U.S. economic stimulus package, which included federal tax cuts, expansion of unemployment benefits and other social welfare provisions.
Schumer told the chamber he wanted to make $30 billion available for direct lending to small businesses.
"This is not going to solve all the problems, (but) if you're not having increased sales, you're not hiring anybody no matter what tax break there is," Mid-Hudson News Network quoted Schumer as saying.
