A never-used U.S. tax withholding mandate should be repealed both the White House and Republicans in Congress have said.
The 2005 law, the Tax Increase Prevention and Reconciliation Act, was intended to partly offset the cost of tax cuts, Business Law Daily reported Thursday. It required the government to withhold 3 percent of the payment on government contracts as a safety net against potentially unpaid taxes.
Rep. James Lankford, R-Okla., said, "We should not have a national policy that assumes every contractor in America is a tax cheat."
The bill to repeal the law has 269 co-sponsors and support from the White House. It was introduced by Rep. Wally Herger, R-Calif., who said, "Full repeal of 3 percent withholding will help create a favorable environment for job creation and is necessary to provide certainty to our small businesses that this harmful provision will be eliminated once and for all."
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