White House says Obama would veto Republican tax cut

Reuters News
Posted: Apr 17, 2012 4:29 PM
White House says Obama would veto Republican tax cut

WASHINGTON (Reuters) - The White House said on Tuesday that President Barack Obama would veto a small business tax cut proposal by Republicans in the House of Representatives that his Democrats complain is biased toward helping the rich.

A partisan fight over the bill, which is set to come up for a vote on Thursday, mirrors a wider election-year battle between Obama and his likely Republican challenger Mitt Romney over tax policy and how best to grow the U.S. economy and shrink huge federal budget deficits.

It also follows the failure of the Democratic-controlled Senate on Monday to advance Obama's "Buffett Rule" legislation, named after billionaire Warren Buffett, to impose a minimum 30 percent income tax on millionaires.

The Republican bill would give a one-year, 20-percent tax deduction on business income to owners of businesses with fewer than 500 employees. Republicans portray that tax cut as one for small businesses, a group they say the Buffett Rule will harm.

Democrats say the group that would gain the most includes wealthy lawyers and consultants.

"Independent non-partisan analyses confirm that 49 percent of the bill's benefits would go to taxpayers making more than $1 million per year," the White House said in a statement.

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The bill faces stiff opposition in the Democratic-controlled Senate, making it unlikely to ever make it to Obama's desk. But the White House said that if it did, the president's senior advisers "would recommend that he veto the bill."

(Reporting By Alister Bull; Editing by Eric Walsh)