The House passed legislation instituting a one-year, 20 percent tax cut for businesses with fewer than 500 employees today on a largely party line vote of 235-173.
The bill, introduced by Majority Leader Eric Cantor, was touted by Republicans as a means of driving economic growth.
“Our bill puts more money into the hands of small-business owners so they can reinvest those funds to retain and create more jobs and grow their businesses. Plain and simple,” the Virginia Republican said.
Democrats unloaded on the legislation, saying it was a poorly designed giveaway to the wealthiest Americans. “This bill is not targeted at job creation. Frankly, it is not targeted at all,” Rep. Joe Crowley (D-N.Y.) said.
Rep. Heath Shuler (D-N.C.) called it “one of the most fiscally irresponsible, flagrantly hypocritical pieces of legislation House Republican leadership has brought to the floor in the 112th Congress.”
Minority Leader Nancy Pelosi’s office sent a memo with the subject line “The Who’s Who of Cantor’s Tax Cuts for the Rich and Famous” that included photographs of Paris Hilton, Donald Trump and Kim Kardashian as examples of the type of business people who would benefit from the tax cut because their businesses have less than 500 employees. Other examples of beneficiaries include sports franchises and hedge funds, as well as media mogul Oprah Winfrey and smut empire owner Larry Flynt.
The proposal also drew fire from the conservative editorial page of the Wall Street Journal, which called the tax cut a “gimmick” that wouldn’t spur economic growth because it did not change economic incentives.
The legislation faces poor prospects for being enacted into law. President Barack Obama has threatened to veto the measure, and the Democratic-led Senate is unlikely to take it up. Senate Majority Leader Harry Reid (D-Nev.) and other top Democrats ripped the bill in a press conference today.
Democrats used their motion to recommit to offer a proposal to prohibit pornographers, lobbyists, companies that outsource jobs, companies that violate the Iran Sanctions Act, “illegal businesses pertaining to drugs and prostitution” and golf courses and clubs that discriminate on the basis of sex or race from receiving the tax cut.
Cantor, responding on the floor to remarks from Democratic Caucus Vice Chairman Xavier Becerra (Calif.), noted that “rich and famous” people would still benefit from the tax cut under the motion to recommit.
The motion fell by a vote of 179-229. A substitute offered by Ways and Means ranking member Sander Levin (D-Mich.) fell by a vote of 172-236.