Two years ago, President Obama said government “can create the conditions for small businesses to hire more people, through steps like tax breaks,” and he has continued to say he supports small businesses and the middle class. Then yesterday happened. The President is now threatening to veto the Small Business Tax Cut Act that will lower taxes to help small businesses create jobs. As Leader Cantor said this morning, “the Small Business Tax Cut Act, that will come to the House floor tomorrow, provides every small business with 499 employees or less the ability to have a 20% tax cut, straight up, money to the bottom line, so that small businessmen and women can have more money to plow back into their business, to grow their business and create jobs.” This 20% tax cut creates more favorable conditions that small business owners need to grow and hire new workers. So is the White House for small businesses or against them?
Today In History: In 1775, British troops march out of Boston on a mission to confiscate the American arsenal at Concord and to capture Patriot leaders Samuel Adams and John Hancock, known to be hiding at Lexington. As the British departed, Boston Patriots Paul Revere and William Dawes set out on horseback from the city to warn Adams and Hancock and rouse the Minutemen.
Birthdays: Rep. Bob Latta, Rep. Justin Amash, Maria Bello, Melissa Joan Hart, Conan O’Brien, James Woods, and Jeff Dunham
Here is what’s in today’s Ledger …
State Of Play: House To Vote On Leader Cantor’s 20% Small Business Tax Cut TOMORROW
Leader Cantor: The 20% Small Business Tax Cut Goes To The Heart Of Job Creation – Small Businesses. Talking to people across Virginia, I am hearing the same message: They want to see a strong economy and job creation. While we've seen some signs that the economy is beginning to grow again, it's not moving at the rate needed to get our friends and neighbors back to work. The only way to shift the economy into high gear is to help our small businesses grow. … Small-business growth is the key to our economic recovery. In order to create an environment conducive to long-term private-sector job growth, we shouldn't be threatening to raise taxes on small-business people and entrepreneurs; we should be doing everything we can to help them succeed. That is why, this week, the U.S. House of Representatives will vote on the Small Business Tax Cut Act to give every small business with fewer than 500 employees a 20 percent tax cut that goes straight to their bottom line. Richmond Times-Dispatch
• Who Will Benefit From The 20% Small Business Tax Cut. The Small Business Tax Cut Act will help 22 million small businesses across the country, including hundreds of thousands in Virginia — no matter how they are organized or whether they pay taxes at the corporate or individual level. A third of those small businesses are owned by women and one-fifth are minority-owned small businesses. This 20 percent tax cut will free up resources so small-business owners can invest in new technology, hire additional workers, or provide a raise to a current employee — something so many employers haven't been able to do. Richmond Times-Dispatch
Cantor: The Small Business Tax Cut Is A First Step Towards Pro-Growth Tax Policies. “It comes down to whether they will get serious on the other side of the aisle to embrace pro-growth policies. Today, Steve Forbes is out talking about the Small Business Tax Cut as a first step towards pro-growth policies and we all know we've got to go about reforming the tax code to broaden the base, bring down the rates for everybody, and get rid of the loopholes that actually put Washington in the place of picking winners and losers through the tax code. We all know that. We also know any kind of tax reform that's been put on the table is rejected by the President and Harry Reid in the Senate because it doesn't raise taxes. All they have done is continue to say we have to raise taxes. Now look, I'm as frustrated as you are and I think that there are going to be some issues that have to be resolved through this the election, and taxes is certainly one of them. It’s a question of whether the American people will think we have a revenue problem in Washington or a spending problem. Most people say we have a spending problem.” CNBC's Squawk Box
Forbes Endorses Cantor’s 20% Small Business Tax Cut, Agrees It Will Help Create Jobs, Boost GDP and Increase Business Capital. Under Cantor’s plan, small businesses could deduct 20 percent of their income from taxes and as much as 50 percent of their W-2 wages. In other words, whether set up as a corporation or one of the 75 percent of small businesses that operate as a pass-through, small businessmen and businesswomen can reap the benefits of the legislation. This can immediately free up funds for small businesses to retain and hire workers. Cantor’s tax plan could ultimately create more than an average of 100,000 jobs per year, yield $112 billion more in gross domestic product and lead to a 2.24 percent increase in business capital, according the new Fiscal Associates study released Monday by the YG Network. Politico
• Study: The 20% Small Business Tax Cut Would Benefit The Middle Class Even More Than Small Businesses. And what about workers? The legislation would help middle-class workers even more than business owners, according to that same study. They would receive more than two-thirds of the added private-sector benefits and the return to middle-class citizens would be $4.30 for every $1 of actual government revenue loss. Politico
Leader Cantor: House Republicans Are Working To Lower Rates For Everyone and Prevent Taxmageddon. “The end of the year is certainly a problem and what we're doing in the House is trying to prepare for what many people are calling Taxmageddon. What we're doing right now is we're laying out a vision for the kind of tax reform that we want to see. Again, this Small Business Tax Cut is a step in the right direction. Overall tax reform means bringing rates down for everybody. We've also got this threat of the sequester that is coming, and this is something that actually will threaten our ability to defend this country. The officials at the Pentagon have said they cannot endure this kind of across the board cut and we're trying in the House to prepare for that. We'll put forward a bill in May that will actually substitute out the kind of cuts to the Pentagon with other cuts that we believe reflect the common-sense vision of how you take the country forward, how you save some of these programs and accomplish efficiencies and get rid of the waste.” CNBC's Squawk Box
State Of Play (2): White House Issues Veto Threat Against A Bill That Would Provide A Much Needed Boost To 22 Million Job Creators and Would Benefit Middle Class Americans
White House Uses Flawed Study To Defend The Administration’s Contradictory Position
• FACT CHECK: This charge is based on a flawed Tax Policy Center (TPC) study. While acknowledging that the proposed tax relief is available to small business employers irrespective of whether they are organized as a pass-through (and thus pay their taxes through the individual tax code) or a C Corporation (and thus pay their taxes through the corporate tax code), the TPC study elected to assign all of the benefits of the tax relief under the bill for C Corporations to the individuals who own stock in those companies, even though the tax relief is received by the small business corporation. It is important to remember that the Small Business Tax Cut is limited to certain employers and capped at 50% of W-2 wages paid, so it is specifically designed to benefit these small business employers. Assigning the benefit to C Corporation stockholders does not only result in a distorted analysis, but also one that ignores the specifics of the legislation. When the non-partisan Joint Committee on Taxation (JCT) produced its distributional analysis it did not assign the benefit received by C Corporations to shareholders. The JCT found that less than 20% of the benefit would go to taxpayers with adjusted gross income in excess of $1 million.
The Administration Falsely Claims The 20% Small Business Tax Cut Would Benefit Corporations With The Biggest Profit
• FACT CHECK: Tax relief under the Small Business Tax Cut is specifically capped at 50% of W-2 wages paid by the small businesses. Therefore, the ability of any firm to benefit from this tax relief is directly tied to the amount of wages they pay their employees. Further, while it is accurate that law firms and professional small businesses could be eligible for relief under this proposal, these very same entities would also be eligible for tax relief under the President’s proposal to provide tax relief for employers that increase their payroll. Senator Schumer is reportedly introducing a proposal similar to the President’s as the Democrat alternative to the Small Business Tax Cut Act.
The Road Ahead: President Obama’s Smoke and Mirrors “Action” On Gas Prices
Editorial: No One Should Expect President Obama’s “Plan” To Lower Gas Prices. No one, least of all President Barack Obama, should expect oil or gasoline prices to fall because of the five-point plan he unveiled at the White House yesterday. Bloomberg
Editorial: White House Spin On The President’s “Plan” Won’t Lower Prices At The Pump. No one should imagine that this will help much at the pump, no matter how much the White House talks of the urgent imperative to protect vulnerable consumers. The Washington Post
Senator Murkowski: Democrats Are Making The Same Mistake They Made 10 Years Ago – Limiting and Restraining Domestic Energy Production Causing Higher Gas Prices, Lower Revenues, and Fewer Jobs. Consider what would be different today had the Senate agreed to open those 2,000 acres a decade ago. If production were coming online right now as expected, it would be providing our nation with a number of much-needed benefits—including a lot more oil. Oil prices would be restrained, if not reduced, as Alaskan crude made up for both actual and threatened losses around the world. Billions of dollars in new revenues would be generated for the U.S. Treasury, reducing the deficit and providing us with a means to invest in new energy technologies. … It's a shame that we are forced to forgo these benefits at a time when all are desperately needed. But this is not just a missed opportunity; it's a cautionary tale. The shortsighted decision made 10 years ago is relevant to the current debate on energy policy. Today, we again find ourselves at a moment when federal policy makers could dramatically increase domestic oil and gas production. But instead of embracing that possibility, many of the same members of Congress are making the same antisupply arguments. What we should realize is that these are empty excuses that hurt our nation's future prosperity. The Wall Street Journal
Committee Check: Chairman Kline and The Ed and Workforce Committee Prepares Legislation To Strengthen Job Training and Employment Services For Workers & Employers
H.R. 4297 Synopsis: Employers continue to experience difficulty hiring a skilled workforce, even though roughly 13 million Americans are searching for work. H.R. 4297 requires a regular analysis of the local workforce needs to help identify any skills gaps that may exist between employers and job seekers, and eliminates barriers in existing law that could prevent individuals from receiving immediate job training assistance.
Here are a few examples of the reforms HR 4297 would make:
• Consolidate 27 ineffective and redundant programs into one flexible fund for state and local leaders to provide employment assistance to its workers;
• Eliminate unnecessary requirements that stand in the way of a worker’s ability to receive the support and training they need immediately;
• Strengthen the role of job creators over workforce development decision; and
• Demand accountability to ensure the system is serving the best interests of workers, employers, and taxpayers.
Read more about H.R. 4297 on Ed and Workforce’s site HERE
Conrad’s “Stunning Backtrack” Leads To Senate Democrats Refusing To Pass A Budget For A 3rd Straight Year. In a stunning backtrack that virtually guarantees Congress for the third year will be unable to produce a budget, Senate Democrats’ top budget writer Tuesday canceled this week’s expected votes on a 2013 fiscal blueprint. … Mr. Conrad said he wasn’t able to get enough Democrats to back a fiscal 2013 budget, much less reach a bipartisan agreement, and that he decided instead to try to kick-start a longer-term debate. “This is the wrong time to vote in the committee. This is the wrong time to vote on the floor,” Mr. Conrad told reporters as he announced his strategy. The Washington Times