Today the House passed the repeal of the 3 percent withholding requirement by a wide, bipartisan margin (405-16). This is great news for manufacturers in the U.S. and a step forward in eliminating one of the burdensome tax requirements looming over businesses. Despite not being scheduled to go into effect until January 2013, the existence of this rule is having a negative impact on manufacturers right now. Manufacturers, especially those with thin profit margins, need certainty as they plan for the future and, with this ill-advised requirement on the horizon they have to plan for a future where they have less to reinvest in their business and their workforce. Plain and simple, it’s costing jobs in America and this is exactly why we need to eliminate this harmful provision as soon as possible.
Fortunately, based on the broad bipartisan of today’s vote, it seems that Congress recognizes the serious issues that 3 percent withholding will pose to manufacturers in the U.S. and job creation. The legislation now moves to the Senate, where we believe there is bipartisan support for repeal. The NAM is part of a strong coalition working toward full repeal. We’re going to continue to put pressure on the Senate to do the right thing and get the 3 percent withholding provision off the books for good.
Carolyn Lee is the Senior Director for Domestic Tax Policy, National Association of Manufacturers