In the “if its good policy lets limit it” category:
Our state legislature feels that in this economic climate, small businesses need an incentive to hire new employees. As a result, there is a new law that provides that if you own a small business that employed 20 or less employees as of 1/1/2009, and if you hired any new full time employees during 2009, you may be entitled to as much as $3000 in tax credits for each new full time hire.
The glitch here is that there is a finite amount of funding available for this giveaway, and once a certain statewide threshold of total credits have been claimed, further credits will be disallowed. The question is, if granting this credit was a good idea, and I believe any time you lower taxes on small business it’s a good idea, then why wouldn’t extending the credit permanently, or even to all businesses be a better idea? Sacramento has no problem saddling us with tax increases across the board, why tax reductions on a tiny basis? Given that we have one of the highest (if not the highest) unemployment rates in the nation, I would think that any pro-hiring incentives, if valuable at all, should be implemented without limitation.
But that assumes that this credit is valuable. It might be if it were permanent. Given that few businesses even know about it, and that smart business people don’t make hiring decisions based on a “maybe” one time tax subsidy, rather than spur hiring I suspect that this will simply be a windfall to the well informed few.
So, consider yourself well informed. If you qualify for the credit, file your tax returns quickly and hope for the freebie!