WASHINGTON, DC: Congressman Dan Benishek today endorsed H.R. 674, a bill that would repeal a 3% tax withholding on certain payments made to private vendors by government entities starting in 2013.
“I see this bipartisan legislation as a common sense reform to lower the tax burden on America’s job providers. With the unemployment rate stagnated at 9.1% nationally, and even higher in Northern Michigan, the repeal of this tax will give entrepreneurs more capital to grow their business and hire additional workers,” stated Benishek, a general surgeon from Iron Mountain.
Benishek stated that a provision included in the Tax Reconciliation Act of 2005 stipulates that when the federal government purchases a product or service from a business, instead of paying that business in full, the government will withhold 3% of the payment owed. This mandate of ‘tax’ withholdings to businesses for goods and services will apply to the federal government, state governments, and local governments with expenditures of $100 million or more. This tax is scheduled to go into effect on January 1, 2013.
“It all comes down to jobs. Northern Michigan’s economy won’t see real private sector growth so long as the federal government continues imposing new taxes on our job providers,” added Benishek.
H.R. 674 has been cosponsored by 269 Members of Congress, including eight other members of the Michigan Delegation. The legislation is also supported by business groups such as the U.S. Chamber of Commerce, National Association of Manufacturers, and National Federation of Independent Businesses.