House passes 20% tax cut for businesses

by
April 20, 2012
By Lisa Mascaro and Don Lee, Los Angeles TimesWASHINGTON — Despite a veto threat from President Obama, the Republican-led House approved a 20% election-year tax cut for most companies intended to entice them to pick up the pace of hiring and, thus, boost the economy.

Critics said the tax cuts for companies with fewer than 500 employees would add $46 billion to the deficit and do little to create jobs. Obama and Democrats attacked the legislation as unfairly favoring wealthier small-business owners, celebrities and sports teams.

The bill, passed on a near-party-line vote of 235 to 173, has a dim future in the Senate, where Democrats have other business tax measures in mind.

The showdown caps a week of politically charged votes on Capitol Hill as the parties offered competing visions for how to address the nation’s fiscal and economic issues heading into the November election.

At times, the floor debates sounded like a prolonged campaign ad as the parties sought to sway voters, particularly the sought-after independents not aligned with either party.

Economic issues remain the core concern among voters.

The Labor Department reported Thursday that new claims for jobless benefits hit their highest level in nearly three months, with 386,000 first-time claims last week. Although that was down 2,000 from the prior week, filings for that first week of April were revised sharply higher. And that bumped up the more reliable four-week moving average to 374,750 — the most since late January.

November’s election could influence the course of action on crucial year-end budget decisions, including mandatory federal spending reductions and theGeorge W. Bush-era tax breaks for wealthier households that Obama wants to let expire.

Earlier in the week, Obama’s proposed “Buffett rule” that would set a new tax rate on millionaires was blocked byRepublicans in the Senate.

“We need to stop and think about what kind of country we want to be,” said House Majority LeaderEric Cantor (R-Va.), the business bill’s author. “One with lower taxes, more growth and more jobs? Or do we want to be one of more government control?”

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