Dayton Proposes Tax Credit To Business For Hiring

ST. PAUL, Minn. (AP) — Gov. Mark Dayton and legislative Democrats on Wednesday proposed the state give Minnesota businesses a $3,000 tax credit for each unemployed person, veteran or recent college graduate they hire as a way to push down the state’s unemployment rate.

“Despite our economic progress in the last several months, there are still 175,000 Minnesotans who are unemployed today,” Dayton said at a Capitol news conference with Democratic House and Senate leaders. “This program is targeted at putting them back to work.”

The proposed tax credit, with a $35 million price tag Dayton said he would pay by closing corporate tax loopholes, is the centerpiece of a DFL jobs package. It includes a $775 million bonding bill for state construction projects, the details of which Dayton plans to release next week. The governor also proposed applying Minnesota sales tax to out-of-state retailers who sell their goods online to state residents, which Dayton said puts Minnesota businesses at a competitive disadvantage.

Job creation is “our top priority for the 2012 session,” which begins Jan. 24, said House Minority Leader Paul Thissen, DFL-Minneapolis.

Dayton said he hadn’t vetted his job creation proposals with Republicans who control the Legislature. Sen. Geoff Michel, chairman of the Senate Jobs and Economic Development Committee, said he welcomed Dayton’s emphasis on jobs. He said he hoped Republicans could find areas of agreement with the Democratic governor to benefit the employment climate.

But closing tax loopholes that benefit Minnesota corporations could be a tough sell with Republican lawmakers who have been unified in opposition to tax increases of any sort.

“I disagree with an approach that spends more money without addressing needed reform and relies on short-term bonding projects to grow our economy,” said House Speaker Kurt Zellers, R-Maple Grove.

Senate Republicans previously proposed their own series of job-creation measures. Michel said Republicans would like to reduce the statewide business property tax and the corporate income tax rate as starting points, as well as reducing state regulations.

Beyond the $3,000 tax credit for 2012, Dayton’s plan would extend a second credit of $1,500 per job created for the first half of 2013. His administration estimated that doing so would create more than 10,000 new jobs in the state.

As of November, the most recent month for which figures were available, Minnesota’s unemployment rate stood at 5.9 percent.

(© Copyright 2012 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • Grynch

    Coming from the mouth of somebody whose views typically swing more towards the conservative side of things and is not a big fan of Dayton at all… this is not a bad idea.

  • Cody Michael Schraut

    The only fault I see with this idea is that with more employees at a business the less hours an employee makes, so unless he has an idea to handle the loss of hours for employees I cannot agree with this.

    • Grynch

      I don’t see how that would have any noticeable effect on this particular proposal. Plus, the issue is unemployment rates, not the amount of hours the already employed are working. The only issue that I see is that a new employee is an investment that cost far more than $3,000.00 down the road so is that really enough incentive?

      And the whole corporate tax loophole thing? They should just flat out put an end to that regardless.

      • Don'tTread

        When you consider that $3000 is 10% or more of a lot of entry level salaries for positions many companies have decided to do without for the past several years, this offer may actually be very enticing.

  • Citizen

    At first glance, this is interesting. But like most case the devil may be in the details. Is Dayton really going to find “corporate tax loopholes” and close them. I sure hope so. But if there are corporate loopholes, (we all know there are) why not just close them. Why do we need a new program to close them?
    It will also be interesting to see how many employers truly hire an unemployed person, veteran, or college graduate when given the opportunity to hire someone who is currently employed and is a better candidate. $3000 is $3000, but over time is that really a big enough carrot to hire someone. It will be interesting to see if employers actually take this into account when making staffing decisions. But I do have to agree with Grynch . . . Not a Dayton fan, but this idea is a good start.

    • Grynch

      He says he’ll find “corporate tax loopholes” and close them but it sounds to me like he’s just replacing one corporate tax loophole with another. As long as the replacement tax loophole creates jobs though, I’m all for it.

    • Citizen

      At least you are civil when you post using my “handle.” But, to eliminate misunderstanding, I voted for Dayton and am a fan. Really, when you looked at the GOP candidates, how could you not vote for Dayton?

  • ali

    Again the government think it can better spend our money then we can. Why not let us use more of our money to buy what we want and then those businesses that have what we want will grow and hire. 3K to

    • Grynch

      The government will always spend and allocate our taxpayers dollars accordingly to what they think is right, that’s why we elect them, if everyone got to choose for themselves what all of their money goes towards we would probably have no roads, firefighters, or police protection. Also… that is the whole point of trying to reduce the unemployment rate, so more people can have jobs and be active consumers.

    • Ron Paul 2012

      Here here

  • J

    sounds like discrimination and a waste of my tax dollars.

  • Ace

    I’m all for hiring the unemployed but if all those companies get a $3000 tax break per person, the state will have less money too operate so how will the state pay its bills when it’s already having trouble with deficits? The money has to come from somewhere and the somewhere is your pocket.

    • Grynch

      That $3,000.00 tax break per person also means that there is another person who is now paying taxes that wasn’t paying taxes before because he was unemployed. The amount of taxes an average employee pays in a year may surpass the $3,000.00 depending on how much he makes so the government may actually profit from it a little bit.

      Still… an employee cost way more than $3,000.00 per year so I don’t see that as enough incentive to hire if the owner of the business doesn’t find it necessary.

  • Does it add up?

    I love how these politicians just pull dollar figures our their arses. I mean, is this really cost affective or is it just another political ploy so they can hopeully pat themselves on the backs.

  • pat

    Here is a good idea Governor
    The next time you have a thought
    Just let it go

  • me

    It’s a good idea as long as those hiriing are required to pay more than minimum wage. it should be a livable wage, and with rents these days….you’re talking each person would need to make a minimum of $15.00 per hour (thats on the low end) in order to make this $3.000 tax credit worth it.

    • Grynch

      It would be worth it to the state from a revenue generating standpoint if it worked but I doubt it would work because the average cost for an employee is well over $3,000.00 down the line so it’s not worth it to the business owner as the employees’ salary exceeds the tax break by a landslide.

    • RIII

      If you want to earn a “Livable Wage” get a collage degree in something that is marketable or learn a skill that is in demand. In the past 10 years I have not hired anyone for under $13 per hour to start, a $3,000 incentive will not make me hire anyone. Lowering the commercial property tax rate, corporate income tax rate, workers comp, unemployment and state employment taxes may. If your only skill is sweeping floors minimum wage is all you are worth.

  • JoseCuervo

    Crazy eyes!!

  • Business Owner

    I’ll layoff my current employees and replace them all with unemployed people. I’ll make a quick profit.

    — Unintended consequences.–

    • Now there's a loophole

      exactly what I was thinking

    • Grynch

      Good point.

    • Don'tTread

      That would be a big gamble. Unless the jobs are menial. Better to have experienced workers then waste productivity on training. Plus, what kind of perception are you creating about your management style?

    • $$$$$$

      That $18000.00 profit for me! Thank Gov!

  • Employer

    Maybe. By the time an employer pays for the unemployment tax and the social security tax and the workers compensation insurance on each employee….well, it would take a bite out of that but still leaves a lot to chew for a (possible) one time credit. It costs a lot to have an employee so I want an experienced reliable worker first.

    • Don'tTread

      It seems that many employers have started resorting to temp agencies for that exact reason. They don’t want to risk a large investment in a new employee and a temp provides a no strings attached opportunity to test the waters. I know from experience that temp jobs are easy to come by even now. For that reason I have not been very sympathetic to the unemployed.

  • Jack Anderson

    Don’t businesses usually hire when there is work to be done, incentive or no incentive? In my opinion, no astute business is going to hire (or add equipment as other govt. programs also often propose) unless they have a need. Politicians frequently come up with this great sounding, but questionable ideas. I guess they think it makes them look good and maybe more re-electable, but how practicle?


    How about cutting the consumers taxes so we take home more of our paycheck which gives us more money to spend which means companies that we buy things are busier and they need to hire more people. Simple isn’t it!

    • Grynch

      Yea it is simple, so is cutting government spending on things that aren’t necessary to compensate for the debt but they don’t do that either.

  • RIII

    If he was serious about private sector job creation he would push to make Minnesota a right to work state. Also lowering our corporate and employment taxes would help, this could be paid for by getting rid of 1/10 of the worthless state employees and merging duplicate agencies.

  • Iron Ranger

    After reading the anti Dayton posts he could offer 1 million dollars per employee and people would complain. I support what the governor is trying. We the people of MN elected him and he is doing what the majority of Minnesotans elected him to do, not the 1% of the bs that is posted here.. Way to go Mark!!!!!!!

    • Rog

      he could offer a million if it was his money but it is not. Its taxpayer money and we will complain when we think it is a stupid idea. We did elect him and we will send him packing.

  • Murph

    Until there is a considerable improvement in the acts and attitude of the U.S. Congress.There will be no jobs,no help,nothing but the inevitable loss of inner city hospitals and clinics and others in the near suburbs.If the greed associated with medical services,outsourcing and the trade of fuel futures on Wall Street is not reduced to a more orderly and economically compatable state of insanity.The whole house of cards WILL crash,crash very hard,very soon! Health care,health insurance,home ownership,quality of goods,services and nutrition all gone.It is easy to see it coming and not much anyone can do about it any time soon. One State,one Congressman would be the best way to get things and people back to work! Dissolve Congress now!

    • Don'tTread

      Congress does have a big role in stabilizing our economy. But it isn’t a matter of them coming to an agreement on a solution within our current confines. This problem is due to a banking system and monetary policy that promote inflation, debt, and dollar devaluation as a way of minimizing problems. But the problem is that minimizing is the only solution they see. They won’t reconsider the system itself. Every tweak they make is a form of intervention in the free market. Inflation, debt, and less purchasing power does equate to less jobs and a poorer America.

  • bodies

    Just think if they would have done something like this at the federal level instead of all of the failed programs! It could have slowed the sending of jobs to other countries.

  • Working tax credit monthly or weekly

    A great deal of parents each working along with … Initial a number of 1, 000 dollars that you receive to your instructional ambitions is free of charge good united states opportunity levy credit … Tax Credit

blog comments powered by Disqus
Thursday Night Football

Listen Live