Graves, Mulvaney Applaud House Passage of 3% Withholding Repeal
House Small Business Committee Chairman Sam Graves (R-MO) and Contracting and Workforce Subcommittee Chairman Mick Mulvaney (R-SC) issued the following statements on House passage of H.R. 674, legislation to repeal the 3% withholding requirement for contracting businesses:
Chairman Graves said, “As the Chairman of the Small Business Committee, I consistently hear about burdensome taxes and regulations that stifle small firms. This withholding tax is a perfect example of a burden that will impose significant financial hardships on our job creators. In fact, the policy is such a bad idea that since its enactment in 2006, Congress has delayed its implementation three times. But deferments create uncertainty, which stunts economic growth. That’s why the full repeal of this tax is needed, once and for all. I encourage the Senate to do the right thing and act quickly to pass this bill that will provide more certainty for the thousands of businesses who contract with federal, state and local governments.”
Chairman Mulvaney said, “This 3% withholding tax would hurt small business cash flow and job growth, especially in sectors such as construction, where pre-tax profit margins rarely meet or exceed 3%. In addition, the withholding tax is estimated to generate far less revenue than the cost to implement it – and that ignores the additional costs to businesses, farmers, hospitals and doctors who would have to comply. House Republicans have focused on jobs this year, passing fifteen separate ‘jobs’ bills that can grow our economy. Today, we will add to that list with the repeal of an onerous tax on business.”
The Small Business Subcommittee on Contracting and Workforce held a hearing on the 3% withholding requirement on May 26, 2011. Chairman Mulvaney also led two press conferences calling for repeal of the tax, on September 14th and on May 26th.