UPDATE 1-U.S. House passes Republican business tax cut

Thu Apr 19, 2012 2:25pm EDT

By Kim Dixon

WASHINGTON, April 19 (Reuters) - The Republican-controlled U.S. House of Representatives on Thursday passed a tax break for small businesses, giving voters a stark alternative to President Barack Obama's politically popular "Buffett Rule" surtax on the wealthy.

In an escalating election-year war of words over taxes, the Republican measure, like the Buffett Rule, is not expected to become law. It is opposed by Democrats, who control the Senate, where the bill was expected to die.

The legislation, pushed by House Majority Leader Eric Cantor, would give a 20-percent tax deduction to employers with 500 or fewer workers, a move that Republicans say is important for job creation and economic growth.

It was approved on a mostly partisan 235-173 vote.

Democrats blasted the bill because it does not limit benefits based on receipts, allowing law firms, hedge funds and other high-income businesses to benefit.

"This isn't about mom and pop ... It's about popping the cork for wealthy taxpayers," Representative Sandy Levin, the top Democrat on the tax-writing House Ways and Means Committee, said in floor debate.

Cantor responded that the bill used the government's own definition of small business.

"This week when every American filed their tax returns, the other party in the Senate voted to increase taxes," Cantor said. "We should not be taking money out of those we need to create jobs."

With both parties eyeing the Nov. 6 presidential and congressional elections, Senate Republicans on Monday blocked a measure that would have imposed a 30 percent minimum tax on households that earn more than $1 million a year.

It was championed by Obama and multibillionaire Warren Buffett who said it was needed to help make the rich pay a fairer share of taxes. Republicans said the Buffett Rule tax would have hurt small business.

Cantor's one-year tax cut would cost taxpayers about $46 billion. Democrats seized on the cost, noting it would add to already huge budget deficits that have rattled global financial markets.

Individual employers making more than $1 million get the biggest break under the bill, an average $45,000 cut, according to the centrist Tax Policy Center.

Senate Democrats are offering their own bill aimed at small business, which includes an employer hiring credit and a tax break on capital investments known as bonus depreciation.

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Comments (4)
rasputyn wrote:
here we go again. These trickle down theories have not worked over the past 10 years. So what do filthy policiticians do? More of the same. Steal from the taxpayer.

Apr 19, 2012 3:03pm EDT  --  Report as abuse
Bucky_2 wrote:
It’s not enough to help anything and the only people that will benefit are people that already can afford to start a business or start *another* business.

Apr 19, 2012 3:06pm EDT  --  Report as abuse
Tom443 wrote:
Rich people don’t create jobs you silly jackazz, demand does.

Apr 19, 2012 3:10pm EDT  --  Report as abuse
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