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 ReidGOP senator: Reid's 'ramblings' are 'bitter, vulgar, incoherent' Reid: We're not breaking the budget deal Overnight Defense: VA chief 'deeply' regrets Disney remark; Senate fight brews over Gitmo 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 CantorJohn Feehery: GOP: Listen to Reince The Trail 2016: Dems struggle for unity Overnight Regulation: Supreme Court rejects GOP redistricting challenge MORE (R-Va.), would not pick between winners and losers among small businesses.
Senate Minority Leader Mitch McConnellMitch McConnellBill would require nominees to release tax returns Overnight Healthcare: House loosens pesticide rules to fight Zika | A GOP bill that keeps some of ObamaCare | More proof of pending premium hikes Senate votes to block financial adviser rule MORE (R-Ky.) also said Tuesday that Obama’s push on the Bush-era rates were intended as a distraction.