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Tax Cuts Rule Jobs Agenda

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In terms of venue, the super committee, created as part of the debt ceiling deal in August and tasked with reducing the deficit, is likely to be the vehicle for any tax cut.

There’s no other must-pass tax legislation this year, and standalone legislation probably faces too much peril on its own.

“On taxes, I think it’s the only game in town right now,” said Caroline Harris, chief tax counsel for the U.S. Chamber of Commerce, about the super committee.

“A lot of people want a jobs component to whatever the super committee does,” a senior Democratic aide said.

But there’s a long way to go in developing the proposals and a tight deadline for the super committee.

Dayspring said the 20 percent deduction proposal would be “like” a tax deduction in the “alternative stimulus” Republicans proposed during the 111th Congress but that the plan is still being changed. “We are continuing to discuss refinements to the proposal for this Congress,” he said.

“In other words, it is still a vague proposal,” Kies said. “People are going to want to have a lot of questions answered.”

“We can cut payroll taxes again, so families have an extra $1,000 to spend,” Obama said in his Aug. 20 address.

Other tax ideas floating around include tax incentives for hiring new workers and allowing American companies to “repatriate,” or bring back to the U.S. without penalty, money they have overseas.

More broadly, patent reform and free-trade agreements are two job-boosting items that are slated for action this fall.

Speaker John Boehner (R-Ohio) included patent reform in a just-released “House Republican Plan for America’s Job Creators.”

Proponents of the legislation say it will speed innovation by reducing backlogs for applying for patents. Versions of the legislation have passed both chambers, but a disagreement over fees the Patent and Trademark Office collects has stalled sending it to the president’s desk.

On trade agreements, Republicans are planning to push a measure reauthorizing the Generalized System of Preferences to highlight what they call White House inaction on three free-trade agreements. 

Passage of the deals — with Colombia, Panama and South Korea — has been stymied by a disagreement between Obama and Congressional Republicans over how to renew aid to workers displaced by trade deals, or Trade Adjustment Assistance.

There is more urgency for action on jobs in the wake of employment figures released Friday, which showed the U.S. economy created a net of zero jobs in August. It was the latest piece of bad economic news that has accompanied a drop in approval ratings for Congress and Obama.

But Kies said that because of how long the federal government takes to implement new laws, for any sort of legislation to affect the unemployment rate before the November 2012 elections, “you really should have had something enacted
Jan. 1 of this year.”

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