Manufacturers: Repeal Tax Withholding Burden on Job Creators
05/26/11 - National Association of Manufacturers (NAM) Vice President for Tax and Domestic Economic Policy Dorothy Coleman issued the following statement today in support of congressional efforts to repeal the three percent withholding provision. While Congress passed the Tax Increase and Prevention and Reconciliation Act in 2005, the implementation of the provision has been delayed until January 1, 2013 unless Congress votes to repeal it:“Imposing a three percent withholding requirement on payments from federal, state and local governments to businesses for goods and services only adds costs and a significant administrative burden on all government contractors. This will affect their bottom lines and constrain the day-to-day capital necessary for future investment and job creation. Many small and medium-sized manufacturers that contract with the government operate on tight margins and will have difficulty absorbing this arbitrary tax.
At a time of high unemployment, imposing further costs on manufacturers is a harmful policy that will limit job creation. While we are glad Congress and the IRS have delayed implementation due to various concerns, manufacturers will continue to advocate repeal before this tax becomes effective in 2013.”
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