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Senate Dems Announce Small Business Tax Cut Plan

3/26/2012 3:00 PM ET

Senate Democratic leaders on Monday unveiled a tax cut plan for small businesses, daring Republicans to oppose it or face voters' wrath.

Majority Leader Harry Reid, D-Nev., and Democratic Policy Committee Chairman Charles Schumer, D-N.Y., announced a two-part plan that includes a tax credit and a depreciation measure.

The tax credit is a 10 percent credit that would be given to employers who increase their payroll during 2012.

The depreciation measure would allow employers to write off investments in equipment that they make this year, a provision that Schumer said would reduce businesses' average capital costs by 75 percent.

"These are solutions that have proven successful in creating jobs," Reid said during a conference call with reporters. "This tax credit is aimed at small businesses, not huge corporations that are already raking in profits."

For the payroll credit, there would be a maximum increase in eligible wages of $5 million per employer, and the amount of the credit would be capped at $50,000 -- measures that Reid and Schumer said would limit the benefit to smaller businesses.

The depreciation measure would be 100 percent, as long as the purchase is made before January 1, 2013.

Reid and Schumer sent several salvos towards Republicans, accusing the minority party of "camouflaged handouts" to the wealthy even as Reid called for cooperation.

"This is a place where Democrats and Republicans should be able to find common ground," Reid said. "But if they want to fight about nothing, I hope they won't want to fight about this… I hope our Republican colleagues will join us."

Schumer said the plan represents a pro-active approach by Democrats and predicted it will pass the Senate.

"It would be unfathomable that Republicans would block a tax cut aimed at small businesses," Schumer said.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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