The President yesterday signed HR 2847, the latest "jobs" bill, into law. The centerpiece of the bill is a provision forgiving employer FICA (but not Medicare) tax on "qualified" employees hired after February 3 for payroll earned from today thorugh December 31, 2010.

A "qualified employee" is one who has worked less than 40 hours in the 60 days prior to employment. This gives employers a perverse incentive to make potential hires sit out a little while, getting a little more broke, before they start, just to make sure they've been out of work for 60 days. That's stupid tax policy for you. The break is unavailable for employees who replace other employees, or for relatives of 50% owners. A $1,000 tax credit will also apply to qualified employees who stay on the payroll for 52 straight weeks.

Of course, these provisions will do little or nothing to encourage hiring. You hire new employees when you need them to take care of customers. No tax break will make you hire people to stand around. But for those fortunate enough to be hiring anyway, it will be found money.

The bill also extends the $250,000 limit for Section 179 deductions -- the deduction for assets that would otherwise have to be capitalized and depreciated -- through 2010. It had been slated to fall to $136,000 for this year.

The bill also has some offshore tax enforcement provisions, including some more shoot-the-jaywalker $10,000 minimum penalties for foot-fault violations.


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