(Bloomberg) The U.S. House of Representatives voted to revive a lapsed tax break for small businesses that encourages them to purchase equipment.
The 272-142 vote was short of the two-thirds majority needed to override a threatened veto by President Barack Obama. One Republican voted against the bill and 33 Democrats joined Republicans in supporting it.
The measure, which includes two narrower provisions for S corporations, would cost the government $79 billion over a decade in forgone revenue, according to the nonpartisan Joint Committee on Taxation.
Until Dec. 31, 2014, small businesses were able to immediately write off as much as $500,000 instead of spreading the deductions over multiple years; that level dropped to $25,000 this year. The bill passed Friday would permanently reinstate the higher limit and index it to inflation.
Republicans said Congress should act now, instead of waiting until December as it did last year, to let businesses know what tax policy will be for the current year.
“Let’s stop this monkey business,” Representative Paul Ryan of Wisconsin, chairman of the House Ways and Means Committee, said during floor debate on the measure. “Let’s stop this crazy notion of injecting all this uncertainty into small businesses.”
The White House said Obama opposes the bill because it lacks budgetary offsets and because it’s being considered outside of a plan for addressing other expiring tax breaks. The administration favors expanding small businesses’ ability to write off expenses as part of a broad revision of the tax code.
“To select out the low-hanging fruit for tax reform and leave the hard work for how we’re going to raise the money to pay for it for later does not make any legislative sense,” said Representative Charles Rangel, a New York Democrat.
Senators haven’t settled on a strategy for how to address the House’s attempts to make some lapsed tax breaks a permanent part of the U.S. tax code.
Friday’s vote followed a similar House vote Thursday, in which the House passed a measure reviving expired charity tax breaks and extending them indefinitely. The vote on that bill exceeded the two-thirds threshold.
The small-business tax bill is H.R. 636. The charity tax bill is H.R. 644.
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