House passes extension of small-business tax credits

The House on Friday passed legislation to renew tax credits for small businesses indefinitely.

Approved 272-142, the bill would extend three tax breaks, including one known as the Section 179 credit that allows businesses to write off certain expenses. Thirty-three Democrats joined all but one Republican in support.

{mosads}Democrats largely support renewing the tax breaks, often called “extenders” because of the need to renew them regularly. But Democrats objected the GOP proposal of doing away with the expiration dates without offsetting the cost. The Joint Committee on Taxation estimates that the bill would cost $79 billion over 10 years.

More than 50 tax breaks, including the ones in Friday’s bill, expired at the end of 2014.

The Section 179 credit allows businesses to write off up to $500,000 of investments in new property and equipment, including computer software, each year. 

Republicans maintained keeping the credits on the books would provide taxpayers with more certainty.

“We are saying, ‘Let’s stop this monkey business.’ Let’s stop this crazy notion of injecting all this uncertainty into small businesses and make this provision that is bipartisan, this provision that we know creates jobs, let’s make it permanent,” said House Ways and Means Committee Chairman Paul Ryan (R-Wis.).

But Democrats said that the tax credits, which they support, should be considered as part of a broader overhaul of the tax code.

“To cherry-pick certain provisions where policy-wise it may make sense and there’s great agreement behind the policy that’s being offered, not paying for it undermines the ability for us to comprehensively reform the code, making the difficult decisions so we don’t leave a legacy of debt for future generations,” said Rep. Ron Kind (D-Wis.).

The House passed another tax extenders package on Thursday regarding credits for charitable giving, which passed 279-137.

The White House issued veto threats against both measures, arguing that Republicans are employing a double standard when it comes to demanding offsets for policy priorities.

“They are also seeking to impose a double standard by adding to the deficit to continue and create tax breaks for businesses, after insisting on offsetting the cost of measures that help middle-class and working Americans, such as the extension of emergency unemployment benefits,” the White House said in a statement of administration policy.