The U.S. House approved a bill yesterday to cut taxes by 20 percent for one year for companies with fewer than 500 employees. All the Iowans present voted for the legislation: Republicans Tom Latham (IA-04) and Steve King (IA-05) and Democrats Dave Loebsack (IA-02) and Leonard Boswell (IA-03). Bruce Braley (IA-01) was absent. His staff have not responded to my request for comment on how he would have voted.

The roll call shows that only 18 House Democrats supported this bill. Once again, Progressive Caucus member Loebsack joined Republicans and a small group of primarily Blue Dog Democrats. Bleeding Heartland has discussed this pattern in the context of Loebsack’s votes for a balanced budget constitutional amendment, to block non-existent EPA regulations on farm dust, to make it more difficult for the federal government to regulate small business, and to extend a pay freeze for mostly middle-class federal workers.

After the jump I enclose a statement from King and more details on the Congressional debate over small business tax cuts.

H.R. 9, the Small Business Tax Cut Act, is the brainchild of House Majority Leader Eric Cantor. Pete Kasperowicz and Bernie Becker reported for The Hill,

Cantor, as he has throughout the week, pressed the case for the tax cut on Thursday, saying it was something lawmakers could put into place while they laid the groundwork for a comprehensive overhaul of the tax code.

“What we want to do in a permanent way is effect broader tax reform,” the Virginia Republican said. “But since we can’t see eye to eye on that, since we’ve still got work to do, let’s give the small businesses some help now.”

But Democrats in both chambers slammed the proposal on Thursday, citing data asserting that almost half of its benefits would go to those making more than $1 million per year.

The White House has threatened to veto the tax cut, which would be in effect for one year and available to companies with under 500 employees.

This bill won’t ever reach President Obama’s desk. Senate Democrats are working on a different small-business tax cut bill, “which would tie tax relief to adding new workers or giving raises to existing employees.”

H.R. 9 would cost about $46 billion in one year. The high price tag put off Representative Tom McClintock, one of 10 Republicans to vote no yesterday.

“[I]t merely shifts current taxes into the future,” McClintock said immediately after the 235-173 vote. “Once a dollar has been spent, it’s already become a tax, taken either from today or tomorrow to pay off deficits.

“Nor does H.R. 9 do much to promote economic growth because it does little to reward new productivity at the margin,” he added. “At best it produces a one-year ‘sugar high’ until the bills come due.” […]

“Tax cuts without either spending reductions or real economic growth are an illusion,” [McClintock] said. “Real tax reform would permanently reduce the marginal tax rate for all businesses and cut government spending concurrently. This would encourage and reward growth, shift investment decisions from politicians to entrepreneurs, and not rob our economy of its future.”

With unemployment at historically high levels, I believe government action to stimulate the economy should take precedence over balancing the federal budget. It makes me laugh when so-called deficit hawks want to charge billions more on the national credit card without any guarantee jobs will be created.

[Democratic Representative Alcee] Hastings spent some time during the rule debate pressing Rep. Pete Sessions (R-Texas) to defend the bill, including by asking whether some of these tax benefits might be enjoyed by well-off companies. Sessions agreed that could happen, but said Republicans are looking to increase growth at all small companies, not just those that are struggling.

“There are many out there who have successful businesses, but our point is, we want them all to grow,” Sessions said. “A successful business is able to hire new people; unsuccessful businesses struggle and cannot provide – not only an increase in the amount of pay, but also the benefit issue becomes difficult.”

Hastings also asked whether the bill would allow companies to receive the tax cut even if they don’t hire anyone, to which Sessions replied that Republicans are not trying to micro-manage these companies.

“We do not tell them what to do,” he said. “There are no limitations in this bill that would say that you must or must not do these things.”

Steve King’s office sent out this press release on April 19 (emphasis in original):

King’s Vote will Aid in Small Business Development

Washington, DC- Congressman Steve King (R-IA) released the following statement today after voting for the Small Business Tax Cut Act of 2012. The bill will give businesses with fewer than 500 employees a 20% tax cut. Today, small businesses face federal tax rates as high as 35%.

“While Democrats looked for opportunities to increase taxes this week, I remain focused on creating the right environment for businesses to thrive,” said King. “Today I voted to decrease taxes for small businesses because I know what it’s like to make payroll each week and run a small business. One of the reasons I first ran for office was to help create an environment where small businesses can thrive. Getting government out of the way is critical for the American entrepreneurial spirit to survive, and without that, we’ll never get our economy back on track.”

Any relevant thoughts are welcome in this thread.