How Government Can Help Small Businesses: Repeal 3% Withholding Tax on Federal Contractors

PRLog (Press Release) - Oct. 28, 2011 - Columbia, Maryland – There isn’t any life left in the proposed American Jobs Act as a whole, given the major blow it sustained following a U.S. Senate vote more than a week ago.

But there are a few provisions in the jobs bill which should be saved, EZGovOpps President and CEO James Bratten said today.

One of those provisions in particular would help a sizable swath of American small businesses because the provision involves repealing the three-percent withholding tax on government payments to government contractors, Bratten said.  While this tax is not in effect yet due to successful congressional votes to delay its enactment, it remains on the books.

“This tax will be a financial burden for government contractors,” Bratten explained.  “It would especially hamper small companies which are already working on razor-thin budgets but would like to reinvest in their businesses --- and perhaps hire additional staff.  Maybe they would bring back laid-off workers, or make equipment purchases.  These sort of reinvestments help feed the American economy, which appears to be anemic right now.”

Another problem with this payment withholding tax:  Government agencies would be saddled with accounting and administration burdens, Bratten added. House Majority Leader Eric Cantor (R-Va.) has pledged to take positive action on this.

“The President has my word that over the next month we will make permanent the three-percent withholding provision from his American Jobs Act,” Cantor said in an Oct. 3 media briefing.

Bratten’s call for the repeal of this tax stems from his belief that small businesses will lead the way to getting people back to work in this nation.  

“To some extent, America’s economic success depends on the success of small businesses in this country.  We need to remove some of the unnecessary taxes, such as the 3-percent withholding tax, and regulations which can keep American small businesses from functioning and flourishing,” The EZGovOpps CEO added.

For more information about EZGovOpps and its services, visit www.EZGovOpps.com.

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About EZGovOpps:
EZGovOpps provides businesses in the government procurement marketplace with a rich set of market intelligence resources, and a convenient portal for finding government contract opportunities at the federal, state and local level. EZGovOpps takes government contracting to the next level by lowering the barrier to entry with affordable intelligence and easy access to the information government contractors need to be successful. For more information, visit us online at www.EZGovOpps.com.