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House Approves Tax Breaks For Small US Firms

by Mike Godfrey, Tax-News.com, Washington

20 February 2007


The House of Representatives voted yesterday to pass a package of tax breaks for small businesses affected by a proposed increase in the minimum wage, which would be worth a total of $1.8 billion.

The bipartisan legislation, known as the Small Business Tax Relief Act of 2007, was introduced last week by Ways and Means Committee Chairman Charles Rangel and Ranking Member Jim McCrery. It would extend certain tax provisions for small business owners, and paves the way for the House and Senate to come to agreement on legislation to raise the Federal minimum wage from $5.15 per hour to $7.25 per hour.

The measure was approved with broad bipartisan support, passing by a margin of 360 to 45.

“Bipartisanship is alive and well in the House of Representatives,” said Chairman Rangel. “The cooperation between Republicans and Democrats that made this bill possible should set the tone for the rest of the Congress as we search for common ground and solutions to tough issues. By working together, Ranking Member McCrery and I delivered targeted, responsible tax relief to small businesses and paved the way for Congress to pass an increase in the Federal minimum wage.”

“These tax cuts will directly help the small businesses hurt by rising costs when the minimum wage increases,” added Ranking Member McCrery. “Going forward, the amount of tax relief in this bill should serve as a floor, not a ceiling, in our negotiations with the Senate. While I hope we can agree on a larger figure, the challenge - in this new world of PAYGO budget rules - will be to find offsets that don't hurt more than the tax relief helps. I look forward to working with Chairman Rangel and our colleagues in the Senate to get the best law possible.”

The result of the House vote was welcomed by Max Baucus, the Chairman of the Senate Finance Committee, who has crafted a bill containing more comprehensive tax breaks for small firms, worth about $8 billion.

“The House vote puts us one step closer to keeping our promise of a pay raise for America’s workers. Now, it’s go time to get this minimum wage increase done,” announced Baucus.

“I know there are differences between the bills, but I’m confident they’ll be worked out. I’m already talking with my colleagues in the Senate and in the House about the best way to get a bill that can pass this Congress. It’s time to take this minimum wage increase the last mile into law," he concluded.


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