House Republicans on Wednesday are expected to unveil a proposal to give small businesses a temporary 20 percent tax cut.
“This is a bill that goes directly toward making it easier for small-businessmen and -women to get back into the game, to keep more of their money so it can be invested to retain and create more jobs,” Majority Leader Eric Cantor (R-Va) said following a GOP conference meeting Tuesday.
Republicans have been working on the bill for weeks, according to The Hill, and they're hoping to time its passage off the House floor for April 15, aka Tax Day.
“We want to make it easier for small-business people to operate, for families to afford to be able to go to the gas pump and do what it is that they want to do,” Cantor said.
The plan will give businesses with fewer than 500 employees the ability to exclude 20 percent of their income from taxation. Unlike similar legislation House Republicans have suggested in recent years, this version does not exempt businesses such as professional sports teams and hedge funds – businesses that, Democrats argue, do not need a financial boost. Democrats also say it would complicate the tax code.
Republicans sneered at the payroll tax cut, calling it and other short-term tax breaks a "sugar high" for the economy, but this bill is expected to win wide support. One plus for some lawmakers: That small-business owners are benefitting, not workers.
“Look, stimulus spending and temporary tax rebates, they didn’t work when President Bush tried them. They didn’t work when President Obama tried them,” Rep. Paul Ryan (R-Wis.), the chairman of the House Budget Committee, said on NBC’s “Meet the Press” in February, according to The Hill. “And they’re a very poor substitute for pro-growth economic policies.”
The time limit on the cut also may help its passage.
Rep. Patrick Tiberi (R-Ohio), who chairs a House Ways and Means subcommittee that deals with the tax code, told The Hill last week: “I prefer long-term tax policy, but understand we have to work within the confines of what we have now, which is a president and a Senate that are under different control."
Cantor, who has led the push toward legislation, last week told the Greater Richmond Chamber of Commerce: "It doesn't matter how you are organized. … It is money straight to the bottom line of the small businessman and woman to be able to retain more of the monies earned to be able to invest back in those businesses and create more jobs."
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