The proposed American Jobs Act would put $1,500 in the pockets of every typical household in Colorado, which in turn would grow local economies, stimulate small business and generate new employment throughout the state. Over the long run, the federal legislation would make investments in our nation’s schools and infrastructure — creating more contracting opportunities for small businesses.
President Barack Obama sent the American Jobs Act to Congress in September, building on the 17 tax cuts for small businesses the president already has signed into law.
The latest measure would cut payroll taxes in half (to 3.1 percent) for 98 percent of businesses. It also would eliminate payroll taxes for small businesses that create new jobs. In addition, the American Jobs Act includes tax credits for small businesses that hire unemployed veterans, service-disabled veterans and workers who’ve been unemployed for at least six months. These tax cuts are designed to have the maximum effect on job creation. The cuts would give small business owners more money to invest in their business and hire new workers.
At the same time, the American Jobs Act would make long-term investments in America’s economy. The measure contains billions of dollars in investments in our roads, railways and airports, including the creation of a National Infrastructure Bank. These investments would mean contracts that increase the bottom lines of small firms and give them the revenue they need to create jobs. To further benefit small contractors, the American Jobs Act would raise the limit on U.S. Small Business Administration-guaranteed surety bonds to $5 million.
Of course, there are ways to support small businesses that don’t require new legislation. That’s why the president also ordered federal agencies to cut the time it takes to pay small contractors in half, from 30 days to 15 days. This change will free up working capital and save small business owners billions of dollars.
Job creation is Obama’s top priority, and the American Jobs Act offers a crucial step to putting Americans back to work. The American Jobs Act contains bipartisan ideas that both parties have supported in the past, and it’s completely paid for. The president has called on Congress to pass the bill, and pass it now.
Specific effects of the American Jobs Act in Colorado include:
Tax cuts to kelp small businesses hire and grow: The president’s plan would cut the payroll tax in half to 3.1 percent for employers on the first $5 million in wages — providing broad tax relief to all businesses, but targeting the 98 percent of firms with wages below this level. In Colorado, 130,000 firms would receive a payroll tax cut.
Put workers back on the job while rebuilding and modernizing America: The president’s plan includes $50 billion in immediate investments for highways, transit, rail and aviation, helping to modernize an infrastructure that now receives a grade of “D” from the American Society of Civil Engineers and putting hundreds of thousands of construction workers back on the job. Of the investments for highway and transit modernization projects, the president’s plan would make immediate investments of at least $495 million in Colorado that could support a minimum of about 6,400 local jobs.
The president proposes to invest $35 billion to prevent layoffs of up to 280,000 teachers, while supporting the hiring of tens of thousands more and keeping police officers and firefighters on the job. These funds would help states and localities avoid and reverse layoffs now and would provide nearly $479 million in funds to Colorado to support up to 7,000 educator and first responder jobs.
The president proposes a $25 billion investment in school infrastructure that would modernize at least 35,000 public schools — investments that would create jobs while improving classrooms and upgrading our schools to meet 21st century needs. Colorado would receive more than $265 million in funding to support as many as 3,400 jobs.
The president proposes to invest $15 billion in a national effort to put construction workers on the job rehabilitating and refurbishing hundreds of thousands of vacant and foreclosed homes and businesses. Colorado could receive about $183 million to revitalize and refurbish local communities in addition to funds that would be available through a competitive application.
The president’s plan proposes $5 billion of investments for facilities modernization needs at community colleges. Colorado could receive $57.5 million in funding in the next fiscal year for its community colleges.
Pathways back to work for Americans looking for jobs: Drawing on the best ideas of both parties and most innovative states, the president proposes the most sweeping reforms to the unemployment insurance system in 40 years to help those without jobs transition to the workplace. This could help put the 98,000 long-term unemployed workers in Colorado back to work.
Alongside these reforms, the president has reiterated his call to extend unemployment insurance, preventing 33,700 people looking for work in Colorado from losing their benefits in just the first six weeks. Across the country, the number saved from losing benefits would triple by the end of the year.
The president proposes a new Pathways Back to Work Fund to provide hundreds of thousands of low-income youth and adults with opportunities to work and achieve needed training in growth industries. Pathways Back to Work could place 1,600 adults and 5,100 youths in jobs in Colorado.
Tax relief for every worker and family: The president’s plan would expand the payroll tax cut passed last December by cutting workers’ payroll taxes in half next year. A typical household in Colorado with a median income of around $56,000 would receive a tax cut of around $1,740.