Bill Overview
Title: Employee Retention Tax Credit Reinstatement Act
Description: This bill provides for a reinstatement of the employee retention tax credit through 2021. The credit was established to compensate employers whose businesses were negatively impacted by the COVID-19 pandemic for wages paid to their employees.
Sponsors: Sen. Hassan, Margaret Wood [D-NH]
Target Audience
Population: Business owners affected by COVID-19 who retained employees
Estimated Size: 20000000
- The target population includes business owners who have been affected by the COVID-19 pandemic, particularly those who retained employees during financially difficult periods.
- Globally, many businesses were affected by the pandemic, meaning a significant number of employers worldwide could be eligible for tax credits.
- Understanding the global economic impact of COVID-19 involves observing how businesses retained employees and the number of employees who continued receiving wages.
- The credit applies to employees who are not working as a part of the employer's payroll. Given the worldwide scale of business disruptions, the eligible employee population is vast.
Reasoning
- The policy targets business owners impacted by COVID-19 who retained employees. These businesses are primarily SMEs, integral to job creation and retention in the U.S.
- Not all businesses will be equally affected by this credit. The impact varies depending on the size of the business, industry, and the level of pandemic disruption they faced.
- A mix of business types within the population ensures that we understand the varied ways the policy might impact wellbeing. For example, larger businesses might experience lower relative impact due to prior financial resilience.
- The budget constraints require careful selection of eligible businesses to maximize benefits from the policy, potentially focusing more on severely impacted sectors.
- It's important to include people who are not directly impacted, to understand the overall ecosystem and measure externalities.
Simulated Interviews
Restaurant Owner (New York, NY)
Age: 45 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- The tax credit would significantly assist in maintaining staffing levels.
- There's uncertainty about future restrictions, so financial relief is welcome.
- Concerned about bureaucratic hurdles to claim credits.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 4 |
| Year 2 | 6 | 3 |
| Year 3 | 7 | 3 |
| Year 5 | 7 | 3 |
| Year 10 | 6 | 3 |
| Year 20 | 5 | 2 |
Retail Store Manager (Chicago, IL)
Age: 34 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 8/20
Statement of Opinion:
- This would allow us to bring back more employees sooner than planned.
- Worried about sustainability if the pandemic affects the economy again.
- Happy to see the government supporting small businesses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 5 | 4 |
| Year 10 | 4 | 3 |
| Year 20 | 3 | 2 |
Cinema Chain Owner (Los Angeles, CA)
Age: 50 | Gender: male
Wellbeing Before Policy: 3
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- This tax credit could be a lifeline for the ailing cinema business.
- Concerned about future consumer habits and return to cinemas.
- The credit helps, but recovery feels distant without more business.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 6 | 3 |
| Year 10 | 5 | 2 |
| Year 20 | 4 | 1 |
Tech Startup Founder (Austin, TX)
Age: 38 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 2.0 years
Commonness: 9/20
Statement of Opinion:
- The tax credit is less crucial for us but can help accelerate rehiring.
- Continued innovation funding is more important than this policy for tech startups.
- Glad for any support, but feel it's more meaningful for traditional businesses.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 5 | 5 |
| Year 20 | 4 | 4 |
Non-profit Director (San Francisco, CA)
Age: 60 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- This policy indirectly supports our mission by helping maintain staff without extra fundraising.
- Retention credits should extend to non-profits explicitly.
- Advocates for more directed funding to non-profit sector amidst ongoing crises.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 4 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 3 |
| Year 20 | 4 | 2 |
Freelance Graphic Designer (Denver, CO)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 15/20
Statement of Opinion:
- As a freelancer, I won't be directly affected by this policy.
- Glad that business owners especially hit hard might get support.
- Concerned about long-term impacts on the freelance economy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 4 | 4 |
Petroleum Industry Consultant (Houston, TX)
Age: 55 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- Affected industry sectors need this credit more than others.
- Petroleum sector sees different impacts more from energy transitions than from pandemic.
- Supports policy as part of broader economic stabilization measures.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 4 | 4 |
Travel Agency Owner (Seattle, WA)
Age: 40 | Gender: female
Wellbeing Before Policy: 3
Duration of Impact: 6.0 years
Commonness: 6/20
Statement of Opinion:
- The tax credit would allow rehiring of crucial staff before full market recovery.
- Concerns on continued travel limitations.
- Appreciates governmental efforts to assist travel industry hard hit by the pandemic.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 3 |
| Year 2 | 6 | 3 |
| Year 3 | 6 | 3 |
| Year 5 | 6 | 3 |
| Year 10 | 5 | 2 |
| Year 20 | 3 | 1 |
Hotel Chain Manager (Miami, FL)
Age: 48 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 4.0 years
Commonness: 7/20
Statement of Opinion:
- The tax credit could significantly offset losses from lower occupancy rates.
- If tourism rebounds, there's hope for recovery, but concerns about cost management remain.
- Encourages sustained support to encourage travel and tourism industries.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 5 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 3 |
| Year 10 | 5 | 3 |
| Year 20 | 4 | 2 |
Craft Brewery Co-Owner (Portland, OR)
Age: 32 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 4.0 years
Commonness: 8/20
Statement of Opinion:
- Excited about the potential for business stability with such credits.
- More optimistic about expansion post-pandemic with financial aid.
- Desires more clarity on how credits apply to small industrial operations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 4 |
| Year 5 | 5 | 4 |
| Year 10 | 4 | 3 |
| Year 20 | 3 | 2 |
Cost Estimates
Year 1: $30000000000 (Low: $25000000000, High: $50000000000)
Year 2: $0 (Low: $0, High: $0)
Year 3: $0 (Low: $0, High: $0)
Year 5: $0 (Low: $0, High: $0)
Year 10: $0 (Low: $0, High: $0)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- Reinstatement is targeting businesses still struggling post COVID-19, many of which may already have benefited from initial aid packages.
- Government budgetary strain may increase as direct funding via tax credits reduces available tax revenue.
- Potential indirect employment benefits if businesses sustain operations through financial support.