House on Track to Pass Tax Break
Business + Economy

House on Track to Pass Tax Break

The Republican-controlled U.S. House of Representatives was on track on Thursday to pass a tax break for small businesses, pushing back against President Barack Obama's politically popular "Buffett Rule" that would put a new minimum tax on the very wealthy.

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

The bill, 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 to job creation and economic growth.

Democrats blasted the bill because it applies to businesses with fewer than 500 employees, but it does not limit benefits based on receipts, which would allow 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, top Democrat on the tax-writing House Ways and Means Committee, said in floor debate.

With both parties eyeing the November 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.