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California Unveils New Hiring Credit Targeting Small Business

With millions of Californians out of work, on Wednesday, September 9, Gov. Gavin Newsom signed a law giving tax breaks to small businesses that hire employees over the next three months.

The incentive program will offer businesses of 100 employees or less a tax credit of $1,000 on their state tax bills for each new employee hired by December 1, 2020. The credit only applies to businesses that have lost at least 50% of their revenue from April to June 2020, compared to the same time period in 2019. The credit is capped at $100 million statewide, or $100,000 for each business. Businesses get the credit only if they hire employees; not contractors. Furthermore, small businesses that are owned by large companies are not eligible for the credit.

California’s economy has been devastated by the Coronavirus pandemic as the Newsom administration ordered many businesses to close for months to slow the spread of the virus. California lost 2.4 million jobs in April; more than all the jobs lost during the Great Recession a decade ago. The state has added back nearly a third of those jobs since then, but the unemployment rate is still 13.3% — higher than it ever got during the Great Recession. As of Tuesday, the state lists 33 of the state’s 58 counties as the most at risk for the Coronavirus, a designation that requires many businesses to halt indoor operations.

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2016 Tax Reform to be Considered by House Ways and Means Committee

According to a press release on January 19, 2016, House Ways and Means Committee Chairman Kevin Brady (R-TX) announced that the Committee will hold its first hearing of the year Tuesday, January 26, 2016.

The hearing will focus on pro-growth policies that will help create jobs, increase paychecks, and expand opportunities. The Ways and Means Committee’s priorities for 2016 largely follow those already laid out by House Speaker Paul D. Ryan (R-WI), who wants the committee to focus on reforming the tax code, repealing the Affordable Care Act, opening trade possibilities, and reforming welfare programs.

According to George L. Yaksick, Jr., Walters Kluwer News Staff, earlier in January, speaking at an event in Washington D.C., Brady called for a “fairer, flatter, simpler tax code.” He added that he wants to close unspecified loopholes and ease the tax burden on small businesses. Brady has also indicated that he will oppose higher taxes on U.S. energy production.

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