WASHINGTON -- Congressman Eric Cantor (R-VA) has introduced a small business bill that proposes a 20% tax break to small businesses (500 or fewer employees). Called the Small Business Tax Cut Act of 2012, the bill (HR 9) provides the tax break for one year.
"Small businesses are the key to economic growth and job creation in this country. That's why the House is moving forward with real solutions to free up capital and drive small business job creation," Cantor said. "Today, Chairman [David] Camp [R-MI] and the Ways and Means Committee advanced the Small Business Tax Cut Act that will provide more than 22 million small businesses with a tax cut, allowing them to keep more of their hard earned dollars and grow their businesses."
While the bill is supported by dozens of small business groups, Democrats have moved to block the bill in the Senate. The criticism, according to Democratic leaders in the House and Senate, stems from the fact that the bill will allow businesses to receive the tax cut regardless of whether they are profitable and whether or not they hire new employees.
"It allows a company to fire American workers and get a tax break, it allows a company to ship jobs overseas and get a tax break," said Representative Xavier Becerra (D-CA). "Republicans are simply peddling a Trojan horse."
The bill comes in the wake of Republicans shooting down the so-called Buffett rule, which would impose a 30% minimum tax on those making $2 million or more. And it would add approximately $46 billion to the deficit.
According to a report by Congress' nonpartisan Joint Committee on Taxation, the bill's effect on the economy would be "so small as to be incalculable... The one year of tax savings provided by the bill is unlikely to make the costs of much investment in physical capital or labor recruitment and training worthwhile."