Saturday, October 25th, 2014

GOP Pledge-O-Meter

Give small businesses a tax deduction


"Allow small business owners to  take a tax deduction equal to 20 percent of their business income."


Updates

House passed bill that died in Senate

The U.S. House of Representatives acted on this pledge in April 2012, with a bill introduced by Majority Leader Eric Cantor. The bill, H.R. 9, defined a small business as any entity with fewer than 500 employees. It allowed businesses to take a 20 percent deduction from either business income or taxable income.

The House passed it on April 19, 2012, but the legislation went nowhere in the Democrat-controlled Senate. House Speaker John Boehner acknowledged the stalemate after the bill's passage: "While the House is cutting taxes to promote private-sector job creation, President Obama and Senate Democrats are pushing for higher taxes to fuel more government spending.”

We could find no other legislation that accomplished this pledge, and the tax deal brokered to avoid the fiscal cliff did not address business income. We rate this a Promise Broken.

Sources:

THOMAS, "Small Business Tax Cut Act,” March 21, 2012

Speaker.gov, "Keeping the Pledge to America,” Sept. 20. 2012

Speaker.gov, "House-Led Momentum on Jobs Continues With Passage of Small Business Tax Cut Act,” April 18, 2012

Email interview with Joseph Rosenberg, Urban Institute, Jan. 3, 2013