THE DAILY WHIP: FRIDAY, FEBRUARY 13, 2015

H.R. 636– “America’s Small Business Tax Relief Act of 2015” (Rep. Tiberi – Ways and Means) (90 Minutes of Debate). This bill is a combination of three bills permanently extending tax provisions affecting the tax treatment of small businesses and S Corporations, whose income are taxed at the individual shareholder level rather than the corporate level, as C Corporations are.  

The first bill would permanently extend an expired tax provision that increased the Section 179 maximum expensing of depreciable property for small businesses from $25,000 to $500,000, and increased the threshold over which such expensing is phased out from $200,000 to $2,000,000. It also extends the expired expansion of eligible property to include software.

The second bill would allow corporations converted from C Corps to S Corps to hold assets for only 5 years, rather than permanent law's 10 years, in order to avoid paying the full corporate tax rate on the "built-in gain" on income from the sale of that asset.

The third bill would allow a charitable contribution's adjusted basis, rather than its fair market value, to be used in calculating an S Corporation shareholder's individual tax benefit from the charitable contribution.

The JCT estimates that this package of permanent tax cuts will add $79.2 billion to the deficit over 10 years, and Republicans have chosen to bring the bill to the Floor without providing an offset.

This package of permanent tax cuts come on the heels of several other permanent tax extenders bills that Republicans brought to the Floor without offsets last Congress and were dead on arrival in the Senate. However, those bills were only considered as a ‘Plan B’, once it became clear that House Republicans could not support their own comprehensive tax reform strategy authored by Ways & Means Committee Chairman Dave Camp, which did not add to our nation’s deficit. It is hypocritical of new Chairman Paul Ryan to say that he is serious about tax reform and then bring these bills to the Floor as his first order of business.

The choice made by House Republicans to address these provisions one by one, while adding their cost to the deficit, represents an irresponsible approach that will only make reaching comprehensive tax reform and fixing our broken tax system harder.

Ways & Means Committee Chairman Paul Ryan has said that, “The people deserve a government that works for them, not one that buries them in more debt.” Unfortunately, bringing permanent, unpaid-for tax cuts to the Floor does exactly the opposite. The White House agrees and has issued a SAP stating that the President’s senior advisors would recommend that he veto this bill. If House Republicans are serious about fiscal responsibility, they should work with Democrats to make the tough decisions necessary to address our broken tax code through comprehensive tax reform, which would address these and other tax extenders in a way that does not add to deficits and does not limit our ability to invest in domestic discretionary priorities.

The Rule, which was adopted yesterday, provides for a closed Rule and ninety minutes of debate. Members are urged to VOTE NO.

Bill Text for H.R. 636:
PDF Version

Background for H.R. 636:
House Report (HTML Version)
House Report (PDF Version)