Senate Majority Leader Harry Reid is borrowing from the Republican playbook by proposing a series of tax cuts, including a measure being considered this week to extend tax breaks to small businesses.
But Republicans are skeptical of the Nevada Democrat’s motive, suggesting it smacks more of election-year posturing than a sincere desire to cut taxes.
The Small Business Jobs and Tax Relief Act, which easily cleared a procedural vote in the Senate on Tuesday, would grant certain employers a 10 percent tax break if they expand payrolls through hiring or pay increases. It would also cut taxes for companies that invest in new equipment.
Democrats say almost 2 million companies that make new hires or increase wages would benefit from the measure. And because the credit is limited to $5 million in new wages — for a credit of up to $500,000 per company — it would be particularly beneficial to small businesses.
Senate Democrats also plan to introduce legislation later this month that strips tax breaks from companies that move operations outside the country and that offers tax breaks for businesses that relocate overseas jobs to the United States. They also plan to take up an Obama-backed proposal to extend expiring Bush-era tax cuts to families making up to $250,000 annually.
Mr. Reid said his plan focuses on middle-class taxpayers, unlike the GOP strategy of giving tax breaks to everyone including “billionaire hedge fund managers and mega-rich celebrities like Donald Trump.”
The White House on Tuesday issued a statement that it “strongly supports” Mr. Reid’s plan, saying that 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.”
But Republicans hint that Mr. Reid is disingenuous because tax bills must originate in the House. There appears no interest among Republicans who control the House to adopt the senator’s plan.
“You have to wonder whether the bill we will go to shortly is serious exercise,” said Senate Minority Leader Mitch McConnell, Kentucky Republican, shortly before Tuesday’s procedural vote on the measure. “I’m not sure that the majority is interested in passing something.”
Republicans also took Mr. Reid to task for spending time on tax bills that have little or no chance of passing the House while failing to take up the five annual committee appropriations bills that so far have passed the House.
“There’s plenty of work to be done,” said Sen. Roy Blunt, Missouri Republican. “I’m glad to spend the week talking about taxes; I’d actually rather spend the week talking about something that could result in us getting our job done.”
Mr. Reid has accused House GOP appropriators of failing to live up to spending levels agreed to during last summer’s federal debt-limit compromise — a charge Republicans say is nonsense.
“They refused to adhere to that. So that makes it hard to do these appropriation bills,” Mr. Reid said. “Until the Republicans get real, we can’t” bring them up in the Senate.