WASHINGTON — The Republican-controlled House voted Thursday to extend new tax cuts to businesses with fewer than 500 employees, a move designed to contrast with a Democratic push this week to impose higher taxes on those making more than $1 million a year.
The measure was approved on a largely party-line vote of 235 to 173, with both sides contending that the GOP-backed measure is a perfect foil to Democrats’ efforts to pass the “Buffett rule,” which the Senate blocked on Monday.
In the House vote Thursday, 18 Democrats joined Republicans in supporting the measure, while 10 Republicans opposed it. Both Maine Reps. Mike Michaud and Chellie Pingree opposed the bill.
Republicans say their $46 billion tax cut would encourage economic growth by providing relief to struggling small-business owners. Democrats, however, say the measure would provide new tax breaks to some higher-income Americans, particularly business owners who already are performing well.
Senate Democrats introduced a counterproposal Thursday that would give a 10 percent tax break only to companies that hire new employees or increase wages. The measure also would allow businesses to write off major purchases to encourage investment in new infrastructure.
House Majority Leader Eric Cantor, R-Va., who has championed the House bill in recent days with a series of high-profile media events, said Wednesday that his Small Business Tax Cut Act would allow companies with fewer than 500 employees tax deductions up to 20 percent of their business income.
“Our 20 percent small-business tax cut goes straight to the bottom line so small-business owners can retain more capital, invest in their businesses and create more jobs,” Cantor said, citing studies suggesting that the tax cuts could help create 100,000 more jobs annually.
The House bill will be set aside by the Senate, and President Obama has said he will veto it if it passes. The White House has said the measure is “not focused on cutting taxes for small businesses, but instead would provide tax cuts to the most fortunate.”
At a news conferences Thursday, Senate Democratic leaders blasted the House proposal as a win for well-heeled celebrities, including Donald Trump and Oprah Winfrey, who operate companies with fewer than 500 employees.
Sen. Charles Schumer, D-N.Y., said the House vote was a sign that “millionaire’s week” had arrived on Capitol Hill.
“Their bill is missing a vital two words – new jobs,” he said.
But Republican members of the House Ways and Means committee Thursday said the Senate’s approach would punish businesses that were showing signs of success and were best positioned to hire new workers.
Rep. Kevin Brady, R-Texas, said targeting tax relief only to businesses that hire new workers would amount to picking winners and losers.
Neither party showed eagerness to negotiate a compromise. Despite the opposition, congressional Republicans believe introducing modest proposals to help businesses will demonstrate to voters that they have serious ideas for economic development that are being thwarted by Democrats.
Asked Wednesday why Republicans wanted to help firms with up to 500 employees, or why they didn’t limit the tax break to companies with a certain level of income, Cantor said that his bill’s definition of “small business” matches the definition used by the Small Business Administration.
“No more complicated than that,” he told reporters, adding later that “if you look at the numbers, if you look at those who are benefiting, overwhelmingly the beneficiaries are those in the middle class.”
Cantor called Obama’s vow to veto the bill “puzzling,” because the White House has signaled support for helping small businesses.
Congress:
Stop
Spending
Now!
Cut
Taxes
Now!
Shrink
Government
Now!
Thank you!
Mike and Chellie don’t want to see tax revenue shrink – how else to implement more grand entitlements.
We now see that Michaud and Pingree do not want to help small business. They only want to follow the party line. More taxes, more government intrusion, more government handouts, more tarp, more food stamps, more everything except for the small business and the working family.
And here you see it small business owners / operators of Maine…..very clearly your business, employees and efforts are being supported by one side if the aisle and you continue to be resisted by the other side of the political aisle…..it once again points to the fact that the last voting results were of benefit to you all…..
I work for a business with less than 500 employees….and I don’t work for Trump or Opera…..it’s all about winning and not what’s good for America anymore 8(
Just because some small businesses with less than 500 employees are ultra successful no one should get tax relief? Throwing the baby out with the bath water…
The ENVY and the GREED and JEALOUSNESS of the left, will KILL AMERICA!!
“Small business” — Just cuts taxes for what’s already successful and includes no incentive to add jobs. They like to pretend their helping Main Street and Mom & Pop stores, but it’s a front. The number of employees is not illuminating at all as to how much money or assets a business has. They say they don’t want to pick winners and losers (by having an income requirement), then why the employee requirement? It doesn’t add up.
The statements coming out of the House are wildly disingenuous. I personally don’t trust them as they’re fighting tooth and nail to renege on the debt ceiling/super committee trigger cuts.
So, you BELIEVE in CLASS ENVY?? explain, how that, will pay bills….
As the Republicans are always saying if the Democrats spend any money how are you going to pay for it, I now ask the Republicans, how are you going to pay for the cuts. Cuts to military? or are you planning to cut food stamps, medicare or what, lets hear it…
If you get unemployment down and wages up, you automatically cut food stamps, medicaid, and unemployment insurance. So that’s how you pay for the cuts (not to mention the fact that lower taxes will translate into some revenue increases due to higher growth, although that revenue increase may not offset the revenue decrease resulting from lower tax rates).
There is no “cut”,, you just are not collecting “as much” from the COMPANY… the IDEA, is, when people become EMPLOYED, you get it, in income tax, FROM THEM. you would LOSE NOTHING then. And employed people SPEND,,unemployed DO NOT…..
This has been the repubs mantra since reagan: small businesses will be the engine to pull the economy. My question is, if the “small businesses” get tax breaks while the “middle class” gets nothing, unemployment still high, wages going nowhere, who’s going to BUY the gooods that the small businesses want to sell? Do you think the “small business” is going to hire people because he’s getting a tax break? I think not.
Just so that everyone understands,,,,,,,, there are NO actual tax cuts. If it passes, which it will most likely not,,,,, Tax Cuts is a term which means that the corporate tax for those who employ under 500 will not go up when those with over 500 will go up. They are not actually cutting anything. If the government got the idea to cut your federal income tax by 75% this year, well that just means that your tax will probably remain the same as it was last year, and they won’t ask for 75% more than last year. Don’t let the special wording fool you.