What: All Issues : Aid to Less Advantaged People, at Home & Abroad : America's Poor : A motion to waive the budget act for an amendment to H.R. 2 (minimum wage increase) by Sen. Jon Kyl (R-Ariz.) that would extend certain tax breaks for small business investments for nine months/On passage of the motion (2007 senate Roll Call 38)
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A motion to waive the budget act for an amendment to H.R. 2 (minimum wage increase) by Sen. Jon Kyl (R-Ariz.) that would extend certain tax breaks for small business investments for nine months/On passage of the motion
senate Roll Call 38     Jan 31, 2007
Progressive Position:
Nay
Progressive Result:
Win

This vote was on an amendment proposed by Sen. Jon Kyl (R-Ariz.) that would have extended by nine months certain tax breaks to restaurant and retail businesses. Kyl offered the amendment as a way to help small businesses financially cope with the proposed increase in the minimum wage. The tax breaks - for certain renovations and construction of owner-occupied retail outlets and restaurants - are set to expire in March 2008. Kyl's amendment would extend them through December of next year. Kyl claimed that the provision would also provide parity in the tax code, allowing similar business to claim similar tax breaks. For example, the tax code treats fast-food restaurants differently from convenience stores when it comes to depreciating costs of renovations. Under rules put in place by the 1974 Congressional Budget Act, unless a tax break or spending increase is offset by a corresponding increase in revenue, the budget act has to be waived. (These budgetary requirements are commonly referred to as pay-as-you-go, or PAYGO.) Kyl had tried to negotiate an offset with Senate Finance Chairman Max Baucus (D-Mont.), but the two were unable to come up with an agreement. Thus, Kyl's amendment was subject to a vote to waive the budget act, and the motion went down on a 50-46 vote. Kyl complained that he had to find a permanent offset for what amounted to a extremely temporary tax break extension, which he said was a "perversion" of the pay-as-you-go rules. "The very people who are going to bear the impact -- namely, the workers in restaurants, who could see their jobs evaporate as a result of passage of the minimum wage increase -- will find that their job is going to be OK when their restaurant can expand or build a new restaurant, thus creating more new jobs," Kyl said. Kyl further pointed out that the provisions were approved by the Finance Committee "in a totally bipartisan way," and his amendment would simply extend them through the rest of 2008 to allow meaningful relief for small businesses. Ultimately, however, Kyl was unable to muster the votes to waive the budget act, and the amendment was rejected. Thus, the bill to increase the minimum wage went forward without further tax breaks for small business renovation and construction.

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