House Republicans are advancing a series of tax cuts this week affecting millions of businesses and individuals, despite a White House threats to veto the provisions because they would add more than $300 billion to the budget deficit over the next decade.
The debate highlights a dispute between Republicans and Democrats over whether tax cuts should be offset by spending cuts or other revenue increases, making it difficult to enact even popular tax breaks for businesses and families.
One small provision would expand the same college savings plans that President Barack Obama unsuccessfully tried to scale back. Others would make a series of expired tax breaks permanent, including ones that encourage charitable giving and others that make it easier for businesses to invest in new equipment or research and development.
“We are fighting to get people back to work, to get the economy moving, to increase take-home pay and to give businesses as many incentives as we can to get people back to work,” said Rep. Paul Ryan, R-Wis., chairman of the tax-writing House Ways and Means Committee. “That’s what this is all about.”
Many Democrats said they support the tax breaks, but they oppose adding so much to the budget deficit.
“We may have the same objective, but we want to pay for it,” said Rep. Bill Pascrell Jr., D-N.J.
The House voted Thursday to pass a $14.3 billion package of tax breaks designed to encourage charitable giving. One provision offers tax breaks to people who make charitable contributions from individual retirement accounts. Another provides tax breaks for donating property for conservation, and a third expands tax breaks to businesses that donate food inventory.
All three provisions are part of a package of temporary tax breaks that expired at the start of the year. The House bill would make them permanent.
The bill passed by a vote of 279 to 137. Thirty-nine Democrats joined nearly every Republican in voting for the bill.
In its veto message, the White House said it supports efforts to encourage charitable giving. But the statement said House Republicans are imposing “a double standard by adding to the deficit to continue and create tax breaks that primarily benefit higher-income individuals, after insisting on offsetting the cost of measures that help middle-class and working Americans, such as the extension of emergency unemployment benefits.”
Republicans countered that lawmakers from both political parties have repeatedly voted to extend many of the tax breaks on a temporary basis.
“We don’t believe that keeping the tax code as it is should require you to raise taxes on other Americans or other businesses,” said Rep. Kevin Brady, R-Texas. “It seems disingenuous to say if we extend it for one year, it costs nothing. But if we make it permanent and recognize that these are key, critical, truly permanent parts of our tax code, that that somehow is fiscally irresponsible.”
Today, the House is scheduled to vote on a package of tax breaks that enables small businesses to more quickly write off equipment purchases and other expenses. It would add about $79 billion to the budget deficit over the next decade.
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