Small-business tax break for new hires advances in Senate
WASHINGTON — Senate Democrats are trying to put a check mark next to one of the economic initiatives on President Obama’s to-do list: a 10% small-business tax break for companies that expand payrolls.
The Senate overwhelmingly advanced the measure Tuesday, clearing a procedural hurdle on a bipartisan 80-14 vote.
But it is likely to run into resistance later in the week as Republicans seek to tack on more controversial amendments, including those that would repeal the nation’s healthcare law or extend the tax breaks enacted during the George W. Bush administration that expire at the end of the year.
The legislation would provide a 10% tax credit, up to $500,000 on annual payrolls of $5 million, for firms that hire new employees or expand payrolls this year.
It is coupled with a business-friendly provision that would allow companies to write off 100% of the value of new capital investments this year, rather than 50% under current law.
Senate Majority Leader Harry Reid (D-Nev.) said the tax break “would put money back in the coffers of true job creators.”
But this is an election year, which means nothing is easy in Congress.
Republicans do not necessarily oppose Obama’s small-business proposal, but they are reluctant to serve up an easy victory to Democrats during an election year, especially after the president said again this week that he would push to end the Bush-era rates on taxable income above $250,000 or single taxpayers’ taxable income above $200,000.
As the minority in the Senate, Republicans are poised to use the bill as a vehicle to force votes on these and other issues, including a repeal of the healthcare law. The GOP-led House is holding another vote this week to repeal the healthcare law, a largely symbolic effort that Obama has vowed to veto if it were to get to him.
Republican Sen. Orrin G. Hatch of Utah said Tuesday there were “some positive elements” to the small-business bill, but that he would try to amend it with a provision that would extend the Bush-era tax rates for all Americans for another year.
Reid has said he would consider amendments to the bill, but he has shown little tolerance in the past for Republican efforts to alter legislation significantly by tacking on other major issues.
If Reid blocks those amendments from coming to the floor for votes, Republicans could withdraw their support and sink the small-business bill.
