Representative Jeff Denham voted today to protect American job creators from a 3% withholding tax, another job-killing regulation on businesses.
"With so many Californians out of work, we must work harder than ever to improve the climate for job growth in our country. Today I voted to repeal the 3% withholding tax, which would have piled yet another burdensome regulation on our small businesses," said Congressman Denham. "Instead of putting obstacles in the way of job growth, we must focus on making our business climate competitive again in order to get people back to work."
Unemployment rates in Denham's district are double that of the national average and businesses have suffered from burdensome regulations for too long. If allowed to occur, this rule would prevent businesses from hiring new employees and could in some cases even require that businesses take out a loan to cover the losses due to complying with the law.
Over 1,000 different business associations support the repeal, including: the U.S. Chamber of Commerce, the International Foodservice Distributors Association, the California Association of Public Purchasing Officers, the Construction Employers' Association of California, the Northern California Glass Management Association, and the Northern California Painting and Finishing Contractors, Inc.
Background: In 2006 Congress enacted a 3% withholding requirement on certain payments made to contractors doing business with federal, state, and local governments. The effective date for the requirement is January 1, 2013. H.R. 674 would repeal this burdensome requirement. During a time when it is still a struggle to get access to capital, the requirement takes money out of local economies and gives it to the federal government. H.R. 674 amends the Internal Revenue Code to repeal the 3% withholding requirement on payments due to vendors providing services to federal, state, and local governmental entities.