Provides corporation business and gross income tax credit for employment of persons who have experienced job loss due to automation.
Summary
Senate Bill S4035 proposes to provide a tax credit for businesses in New Jersey that employ individuals who have lost their jobs due to automation. This initiative aims to support workers affected by technological advancements that replace human labor, thereby providing economic relief to both employees and businesses. The tax credit amounts to 10% of the salary and wages paid to eligible employees, with a maximum credit of $2,500 per employee per privilege period or taxable year.
The motivation behind the bill stems from economic reports indicating that a significant number of jobs in New Jersey, particularly those paying below a certain threshold, are at high risk of being automated. Specifically, the 2020 ALICE report highlights that 84% of jobs under $20 per hour and 42% of jobs above that wage are susceptible to automation. The bill seeks to address the resulting unemployment by incentivizing companies to hire workers displaced by automation, thereby fostering job creation in an evolving economic landscape.
S4035 is designed to apply immediately to privilege periods and taxable years starting from January 1 of the year following its enactment. The eligibility criteria stipulate that businesses must maintain employment with the affected individuals for at least seven months prior to claiming the tax credit. This condition emphasizes the importance of retaining staff over the long term to fully benefit from the incentive.
The bill has potential implications for state economic policies, signaling a proactive approach to mitigate the impacts of technological change on the workforce. However, it invites discussion regarding the balance between promoting business needs and ensuring workers' rights and livelihoods. Notable points of contention may arise around the adequacy of the support measures, with opponents arguing that such credits may not sufficiently resolve the challenges of job displacement caused by automation.