After meeting with executives from several Wisconsin companies in recent weeks, U.S. Sen. Russ Feingold is proposing an extension and an expansion of the HIRE Act, a jobs bill that was approved by Congress in March.
Executives applaud bill to expand business tax credits
The law provides a tax break for American businesses that hire workers who have been unemployed for at least 60 days.
Feingold is proposing to extend the jobs tax credit through 2011 and expand it to help businesses that hire new employees, expand work hours for their current workforce or simply raise worker pay.
Among the bill’s provisions:
- The tax credit would amount to 15 percent of the increase in eligible payroll for 2010 and 10 percent of the increase in 2011.
- The tax credit would be based on a firm’s total eligible payroll so it would reward firms that expand work hours or raise pay as well as hiring more workers.
- The tax credit would be calculated on a quarter over year-ago-quarter basis to avoid seasonal employment spikes. For example, wages for the first quarter of 2010 are compared with wages for the first quarter of 2009.
Over the last couple weeks, Feingold met with several executives representing various industries in the state.
Michael Retzer, chief financial officer and controller of Strohwig Industries Inc. in Richfield, was among those bending Feingold’s ear.
Retzer said the bill that was recently passed actually created an unfair loophole for some employers.
“I think this is a much better idea. With the other one, you can scam the system – fire your employees, turn them over and hire people who have been laid off for 60 days instead. (The new bill) is kind of like a training credit. We have to train our new people,” Retzer said. “There’s a lot of orientation work. It would be very helpful to employees as well as employers.”
Strohwig, which manufactures diecasts for automotive parts and machining for large pieces, has 155 employees at its plant in Washington County. Retzer says the company’s business has picked up in recent months.
Retzer was inspired to become politically involved when he read a BizTimes Milwaukee cover story about “America’s Other War,” which focused on American manufacturers trying to compete in a global economy. He is now the executive director of the Milwaukee chapter of the National Tooling and Machining Association. It is in that capacity that he visits Feingold annually to discuss manufacturing issues.
Richard Reichertz, president of ATACO Steel Products Corp. in Cedarburg, visited Feingold as part of a lobbying trip for the Precision Metal Forming Association.
“I’m in favor of any type of tax deduction for small businesses. We consider ourselves the job creators. Anything we can get back would be helpful for us. You know, 2009 was a tough year for all of us. We see business picking up. This credit would help,” Reichertz said. “We had some wage freezes in place. This will help us get over the wage freezes, which I think will help the economy in general, because our employees will feel confident and start spending money, as well. It also frees up some cash. The banks have tightened their lending standards. We need to continue to invest in our business, in capital equipment, which also will create jobs locally, as well.”
Feingold told BizTimes, “Over the last few weeks, I have had the opportunity to meet with Wisconsin business leaders – both in Wisconsin and some who have traveled out to Washington, D.C., including CEOs of manufacturing and engineering firms. I’ve asked them what they thought about my proposal, and their response has been very positive. These CEOs have told me and my staff how the tax credit would be especially helpful in 2011, when more businesses may be in a better position to expand their payroll as the economy strengthens. While a jobs tax credit won’t solve all the problems businesses face, as one CEO I met with said, the jobs tax credit would be an important arrow in the quiver for businesses. I will continue working to extend and expand the jobs tax credit to help businesses hire and bring down unemployment.”
