Small businesses are and have historically been the job creators for our nation. The same is true in South Jersey. A simple drive around the region -- from Pitman to Vineland to Cape May and everywhere in between -- one would see small business storefronts lining main streets throughout our communities. Countless residents can recall their first jobs at these neighborhood gems or local mom & pop shops. In fact, I began my career at my family's small business based in Rosenhayn.
As with previous economic downturns, we look to small business owners and entrepreneurs to again lift us out of this recession and create new jobs. The government should assist the private sector -- and small businesses in particular - by promoting pro-growth policies. Unfortunately, misguided regulations coming out of Washington are strangling our small businesses and preventing an economic recovery.
Throughout the past month, I have spoken with countless small business owners and members of the Cape May and Salem County Chambers of Commerce about the impact of new federal regulations on their businesses. One provision hidden in the healthcare bill is the new requirement to file 1099 forms with the IRS for all goods and services purchased over $600. Included in President Obama's healthcare reform law, this massive reporting requirement will negatively impact daily operations beginning in 2012. Affecting an estimated 38 million American businesses, the routine purchasing of office supplies, shipping of products, or contracting of phone and Internet service would have to be documented and reported to the IRS.
Completely unrelated to healthcare, this single provision - dubbed the "paperwork mandate" - will ensure businesses think twice before purchasing goods and services and encourage larger companies to consolidate suppliers for their purchases. This is in addition to the previously-known employer mandates placed on many small businesses to provide health insurance coverage to their employees by 2014. Failure to comply by businesses employing more than 50 full-time employees would result in a $2,000 per employee tax penalty, further discouraging hiring by financially-strapped employers.
While these mandates take effect in a few years, significant decisions are on the immediate horizon that will have drastic consequences. The simple fact is that any progress made in encouraging small businesses to expand operations and hire new employees would be wiped out if the upcoming tax cuts are allowed to expire. In addition to the popular marriage penalty tax and the child tax credit that countless South Jersey families depend on, current reductions of the tax rate on dividends and long-term capital gains that are critical to long-term planning by businesses are set to expire on January 1st. If we are truly serious about job creation and economic growth, Congress must continue these tax cuts that benefit our families and small businesses despite President Obama's call to allow them to expire, thus effectively raises taxes in an economic recession.
Given that small businesses create sixty-five percent of jobs in our nation, it is counterproductive to place excessive new taxation and regulatory burdens on them. Until we get the economy on a clear road to recovery, consumer confidence back up and businesses hiring, we must put forth pro-business, pro-job creating and pro-growth policies without undercutting our progress by inexplicable mandates. I will continue to support such initiatives which are critical to keep South Jersey's Main Streets filled with those characteristic small business storefronts.