The small business tax cut bill that the Senate is rolling out Tuesday would spark the creation of nearly 1 million jobs, according to an economic analysis provided to The Huffington Post.
The Small Business Jobs and Tax Relief Act would grant small businesses 10 percent tax breaks for expanding payrolls either through hiring or raises, and would extend for another year the 100 percent bonus depreciation that businesses can take on assets. The bill, which also contains a break on the alternative minimum tax for corporate taxpayers, would cost about $28 billion overall.
The private group Regional Economic Models, Inc., estimates the combined impacts of the cuts would be worth about $87 billion added to the GDP and 990,592 jobs. The bill would also boost personal incomes by about $73 billion, according to REMI’s analysis.
REMI explained that it did the study using preliminary estimates from Congress’ Joint Tax Committee and information from the Small Business Administration to estimate impacts across states and industries.
The bill represents Senate Democrats’ efforts to both spur the economy and put Republicans on the defensive by forcing them to choose whether or not to back the sorts of tax cuts that they normally would in the past. Republicans were still mulling their options Tuesday morning, and waiting to see whether they would be allowed to have amendments.
But for Democrats, the measure is a no-brainer.
“Creating close to one million jobs would put a meaningful dent in the unemployment problem,” said Sen. Chuck Schumer (D-N.Y.), the head of the Senate Democrats’ policy and messaging efforts. “This tax cut is not a cure-all, but it could be a difference-maker for small firms on the fence about adding payroll. After last month’s sluggish jobs numbers, we may be on the verge of a rare moment of agreement on how to help the economy.”
The bill is also meant as an answer to a $46 billion small business tax cut proposed by House Majority Leader Eric Cantor (R-Va.), which Democrats and outside analysts estimate would disproportionately help the wealthy — business owners such as doctors, finance firms and even sports teams — while including no requirement for businesses to hire.