By Bernie Becker - 07/10/12 05:51 PM EDT
Under the Senate bill, which is scheduled for a procedural vote on Tuesday afternoon, small businesses that add payroll — either by hiring new workers or giving existing employees pay raises — would be eligible for a 10 percent tax credit.
The bill also caps, at $5 million, the amount of new payroll for which a company can claim the credit, and extends a provision allowing companies to more quickly write off new purchases.
“Targeted tax relief for small businesses is one of the five to-do items the President has called on the Congress to pass as part of a concrete plan that creates jobs and helps restore middle class security,” the administration said.
The Tuesday vote on the Senate bill comes a day after Obama reiterated his call to extend current Bush-era tax rates only on family income up to $250,000 a year, and to extend those rates for only a year.
Republicans have called for extending all current rates for a year, and even some Democrats have said that they would prefer for $1 million to be the cutoff for extending current marginal rates.
On Tuesday, Senate Majority Leader Harry ReidHarry ReidThe missed opportunity of JASTA States urged to bolster election security How the White House got rolled on the Saudi-9/11 bill MORE (D-Nev.) also said that the Senate small-business tax proposal would be more beneficial to the economy than a bill passed by the House in April.
Under that measure, most companies with fewer than 500 employees would be eligible for a 20 percent tax break, which Reid said Tuesday could benefit people like Kim Kardashian and Paris Hilton.
House Republicans have said their plan, pushed by Majority Leader Eric CantorEric CantorRyan seeks to avoid Boehner fate on omnibus GOPers fear trillion-dollar vote is inevitable Insiders dominate year of the outsider MORE (R-Va.), would not pick between winners and losers among small businesses.
Senate Minority Leader Mitch McConnellMitch McConnell9/11 bill is a global blunder that will weaken US efforts abroad States urged to bolster election security How the White House got rolled on the Saudi-9/11 bill MORE (R-Ky.) also said Tuesday that Obama’s push on the Bush-era rates were intended as a distraction.