New Tax Breaks For Hiring Unemployed Workers

A new bill, signed into law by President Obama, will offer tax breaks for the hiring of previously unemployed workers. The companies who hire these unemployed workers will not have to pay their portion of Social Security payroll taxes for any new worker who was unemployed for the prior 60 days. If the employee is kept for an entire year, the company will receive up to $1,000 back on its 2011 tax return. Obama stated that "This tax cut will be particularly helpful to small business owners...Many of them are on the fence right now about whether to bring in that extra worker or two, or whether they should hire anyone at all. This jobs bill should help make their decision that much easier."
This jobs bill is an example of offering incentives in order to get a company to do what the government wants them to do: reduce unemployment. This is an example of discretionary expansionary fiscal policy due to the increased government spending and decreased taxes involved.