Cantor Proposal Would Slash Tax Burden For Small Businesses
April 4, 2012
House Majority Leader Eric Cantor, R-7th, wants to give businesses with fewer than 500 employees a 20 percent tax cut, a proposal slated to come for a vote in the middle of this month.
"We want small-business people to have more money go to their pockets, not the government's, and then they have more money to make decisions about hiring, about retaining jobs and about creating more jobs," Cantor said Wednesday after talking to Hermitage High School students about personal finance matters.
"They have decisions that they can make, it just allows them more options."
Under his plan, businesses — regardless of how they are organized — that meet the provisions would qualify for the cut. A deduction for any taxable year could not exceed 50 percent of certain wages.
The legislation is slated to come before the House of Representatives for a vote the week of April 16 — around Tax Day.
The plan is winning support from some area businesspeople, including Puritan Cleaners President Gary Glover.
"Anytime we get a little tax break, we can turn that money back around and put it back in the business," he said.
Glover would like to expand by a location or two, rehire some of the employees laid off as the economy soured, or "take better care of our existing associates."
"It's just a way to have more money to spread over those three areas, and any time you do that, your business becomes stronger and better and you do more business," he said.
Critics of the proposal, which would represent about a $46 billion cut, note that a wide range of businesses could qualify for the deduction, including organizations run by wealthy celebrities.
During a recent committee meeting on the bill, Rep. Sander M. Levin, D-Mich., called the plan expensive and inefficient.
"This bill is not a shot in the arm of economic growth, rather it is a shot in the dark," he said, adding that the benefits are not tied to investment or hiring.
Cantor rolled out the Small Business Tax Cut Act of 2012 on March 21, and he's promoting the plan in a TV ad featuring a half-dozen local businesspeople. The ad is airing in his district.
The 30-second spot, released by his campaign operation, opens with Mark Oley of Westwood Pharmacy, followed by Suzanne Wolstenholme of Homemades by Suzanne.
Four others also make appearances in the ad, which is expected to run for the next two to three weeks.
Cantor's 20 percent tax cut proposal was introduced on the heels of the Jumpstart Our Business Startups Act, a package of bills that passed the House and Senate.
President Barack Obama is scheduled to sign the JOBS Act today at the White House with Cantor in attendance.