U.S. Congressman Harold "Hal" Rogers (KY-05) today supported the passage of bi-partisan legislation to permanently repeal the burdensome 3 percent withholding tax on small businesses. A component of Republicans’ Plan for America’s Job Creators, the Withholding Tax Relief Act (H.R. 674) will protect small business job creators from yet another excessive government rule.

“Our Nation’s small business owners are already struggling to make ends meet, and this burdensome withholding tax would simply drain precious capital that could otherwise be used to make payroll, expand production, and create jobs,” stated Rogers, a cosponsor of H.R. 674. “I believe H.R. 674 will put investment dollars back into the hands of job creators and business leaders throughout southern and eastern Kentucky, and represents a small step forward in getting our economy back on track.”

A 2005 federal law requiring that federal, state and most local governments withhold a total of 3 percent on payments to contractors on government projects is scheduled to take effect in 2013. If the 3 percent withholding tax were implemented as scheduled, government entities would be required to withhold 3 percent of payments to companies providing property or services. For example, on an invoice for $20,000, the government would pay the business $19,400 and withhold $600 as a preemptive tax.

This onerous withholding requirement has added to the colossal amount of uncertainty facing employers in this economy, threatening to put companies out of business and taking away the possibility of future job investments. The 3 percent withholding provisions would affect a wide range of Kentucky businesses in the agricultural, medical, higher education, road and infrastructure construction, engineering, and architectural sectors.  Its repeal represents a fiscally responsible approach to job creation, and is consistent with Rogers’ continued focus on policies that will encourage economic recovery, create jobs and build sustainable, long-term growth.

Rogers has served Kentucky’s 5th Congressional District since 1981. With a focus on economic development, job creation, fighting illegal drugs and preserving Appalachia’s natural treasures, he has a reputation for listening to his constituents and fighting for the region he represents.  For more information, visit www.halrogers.house.gov.

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Click Here to download an mp3 audio statement from Congressman Rogers
Runs 1 minute
mp3 verbatim: 

"We must get Americans back to work. That's the cure for this ailing economy. I'm supporting a serious jobs plan. Less government red-tape, pro-small business growth, and tax reform that creates American jobs. 

Today, the House took a small step in cutting out a looming tax on American businesses by voting to repeal a 3% withholding tax imposed on small businesses and job creators.

 If allowed to proceed, this tax would require federal, state, and local governments to withhold 3% of payment due to companies simply to appease the IRS.  That’s billions of dollars that can’t be used to buy equipment, hire a new employee, or expand production. 

 Enough is enough.  I’m proud to stand with business leaders and demand Washington get out of the way of American enterprise and job creation."