Today, the House is considering the rule for the three percent withholding bill. Since Republicans still don’t have a jobs plan, they are touting the repeal as a jobs bill, but we disagree that repealing their own policy before it went into effect has any impact on jobs. And we aren’t the only ones.
A Talking Points Memo article highlights how the three percent withholding rule is a GOP policy:
“The Cantor tweet and subsequent Boehner release also are a bit puzzling because President Obama has long made clear his support for getting rid of the 3 percent withholding tax, and turns out, Republicans were the first to try to impose the tax burden on government contractors in May 2006, although it’s been delayed ever since by both the 2009 Stimulus Act and the IRS.”
“In May of that 2006, 229 House Republicans, including GOP leaders John Boehner (R-OH) and Eric Cantor (R-VA), voted to implement the withholding tax on government contractors, as well as Medicare and farm payments, as a way to ensure that some tax-cheat contractors paid their fair share.”
“That bill extended about $70 billion in tax cuts over a five-year period, including reduced tax rates on capital gains and dividends through 2010 and a patch for the alternative minimum tax, but the 3 percent withholding tax on government contractors was also tucked into the final version of the bill with Republican support.”
And an article in today's Washington Post points out the policy they are repealing is not currently in effect and would therefore have no impact on jobs:
“In fact, in the real world it wouldn’t actually do anything at all. Instead, it would repeal a tax provision enacted in 2006 that has not taken effect. Delayed twice, it is now scheduled to go into effect in January 2013.”
“Zandi said that the withholding repeal would ultimately be approved, even though he regards it as such a minor provision that he did not include it as part of his analysis of the president’s jobs plan, which he concluded would create 1.9 million positions.”
“‘I don’t think it’s meaningful in terms of jobs,’ he said. ‘It’s more trying to clean up something that needs cleaning up.’”
While Democrats support repealing this policy, this bill alone is not a jobs plan. Democrats continue to urge Republicans to take action on the rest of the American Jobs Act – it’s fully paid for, includes bipartisan ideas and will create jobs now. As the President has said, we can’t wait – it’s time for House Republicans to get serious about job creation.