New Proposal Rewards Remote Job Creation
Oct 26th, 2009 | By Dawn R. Rivers | Category: EconomyA new proposal that may provide an interesting new twist on a standard economic development practice, the Rural and Small Town Telework Tax Credit Act of 2009 (H.R. 3627), was introduced by freshman Congressman Thomas Periello (D-VA) late last month. The bill does pretty much just what it says in its refreshingly straightforward title. It creates a tax credit for the cost of purchasing and maintaining the telecommunications equipment that would allow employees to work from home, up to $1,000 per employee or $50,000 total (whichever is less) for the tax year. The catch is that the firm would be required to seek these teleworkers from rural counties or small towns with a population of less than 200,000.
The idea here is that, since those manufacturing jobs may not be coming back, perhaps businesses can be encouraged to hire Americans for service sector jobs. At the same time, the bill does not offer similar assistance to firms that hire independent contractor. In fact, the tax code has no incentives or rewards for firms that make use of workers employed in self-created jobs. The independent contractors themselves would probably prefer for the government to continue to adopt a hands-off policy toward them, all things considered. Is it possible for the federal government to reward firms for creating work for independents instead of just for creating jobs for employees? And can that be accomplished without destroying the independent contractors’ competitive environment? For many, the best answer is the status quo. It is not perfect but, all things considered, further government involvement is unlikely to make matters better.
