–House Approves Republican Tax Cut Plan; Senate Likely To Reject
–House Majority Leader Cantor Says Bill Would Boost Small Firms
–House Minority Whip Hoyer: Tax Cut Bill ‘Fiscally Iresponsible’

By John Shaw

WASHINGTON (MNI) – The House passed Thursday legislation drafted by
House Republicans that would reduce taxable income on businesses with
fewer than 500 employees by 20%.

The bill was passed on a 235 to 173 mostly party line vote. It now
goes to the Senate where it faces an uncertain fate.

Senate Majority Leader Harry Reid blasted the House GOP bill
Thursday as “laughable” and said Senate Democrats will press its own
alternative next month.

The House-passed bill was championed by House Majority Leader Eric
Cantor who has argued that it would spur small business job creation.

“We believe in helping all small businesses,” Cantor said during
the House debate.

Cantor has said the one-time tax cut would cost $47 billion and
would not be offset.

Under the bill, small businesses would be allowed to deduct 20% of
their income from taxes on up to 50% of their W-2 wages. Cantor
emphasized the measure would apply to businesses with fewer than 500
employees.

House Ways and Means Committee Chairman Dave Camp said the measure
would bolster small firms which are the backbone of the American
economy.

“This bill will help small businesses to re-invest, hire new
workers, or provide a raise to an employee,” Camp said.

House Minority Whip Steny Hoyer called the bill “fiscally totally
irresponsible,” adding that it will add $47 billion to the deficit next
year while providing little economic stimulus.

Rep. Chris Van Hollen, the ranking Democrat on the House Budget
Committee, called the bill a “cruel hoax” and quoted a report on the
proposal by the Joint Tax Committee which said its stimulative value
would be “so small as to be incalculable.”

“This is worse than a gimmick,” Van Hollen said.

Democrats claimed the bill is drafted in such a way that deep tax
cuts would go to lawyers, doctors and even movie stars. They argued that
the 500 employee threshold would give tax cuts to many entities that are
not the protype of small businesses that the GOP champion.

The White House opposes the bill.

** MNI Washington Bureau: (202) 371-2121 **

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