House GOP Payroll Tax Fix Averts Small Business “Nightmare,” Protects Jobs
THE PROBLEM: On Saturday, the Senate passed a bill that generated a costly new reporting burden for small businesses through temporary new caps on the wages that are subject to payroll tax relief. Even if followed by a year-long extension, tax experts and leading small business groups say the Senate approach would create substantial problems and prevent many Americans from seeing their tax cut until new software and accounting systems are put in place:
- “The Senate bill would require extensive new record-keeping, and multiple calculations of employees' wages, payroll officials say. … The two-month extension could increase tax-compliance costs for small firms, which already pay proportionately more than large businesses to comply with tax rules, said Kevan Chapman, a spokesman for the National Federation of Independent Business, a small-business group. Particularly for small firms that do their own taxes or rely on software, ‘it's just going to be very complicated,’ he said.” (The Wall Street Journal, 12/22/11)
- “For payroll processors, the two-month option because of the $18,350 cap is the toughest to implement. … Many payroll systems may not be able to make all the needed changes in January, the [National Payroll Reporting Consortium] believes. And some may even struggle to get the job done by February.” (CNNMoney, 12/22/11)
- “[Sherry Dwyer, software support manager for Brentwood-based Optimum Solutions] said it is the worst possible outcome for companies like hers. … Software vendors, she said, will be forced to ‘drop everything’ to implement the changes. Further complicating matters is that not all of a company’s clients are on the same pay schedule, so changes will have to be made in waves. ‘It’s going to be a nightmare,’ Dwyer said.” (Nashville Business Journal, 12/22/11)
While this two-month extension still falls short of providing the certainty Americans need, this solution will at minimum prevent small businesses from bearing a new administrative burden and ensure American workers will see their tax relief as soon as possible. Just as important, the Senate will now join the House in immediately appointing conferees to reach agreement in the weeks ahead on a full-year payroll tax extension.
Speaker Boehner, a former small business owner, has warned all year against short-term Washington gimmicks and quick fixes that create uncertainty and threaten American jobs. That’s why Republicans worked to fix this legislation, and will continue to press for the nearly 30 House-passed jobs bills that remain stuck in the Democratic-controlled Senate and other long-term solutions to help our economy get back to creating jobs.
Tags: House Speaker, press release, payroll tax, jobs, To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!
Posted by Bill Smith at 5:53 PM - Post Link
7 Comments:
Today I sent the below letter to Speaker John Boehner asking him to reach a deal that will extend the payroll tax holiday:
Speaker Boehner:
Last week when Congress abruptly came to a stalemate over extending the payroll tax holiday, I was discouraged. I was discouraged that partisan gridlock got in the way of doing the people’s business and that my constituents will face a tax increase if a compromise cannot be reached in the next week.
These past few days I have met with my constituents in Arkansas’s First District, they are angry and they don’t understand why Congress cannot sit down, hammer out our differences, and have a solution we can all support. My constituents are honest, hard-working people who deserve a Congress that will put partisan politics aside in favor of the greater good. Congress must come together and act to ensure that my constituents, and millions of Americans all across the country, are not hit with higher taxes on January 1st.
The House took action nearly two weeks ago and sent a responsible, comprehensive yearlong payroll tax extension to the Senate. That bill also included an extension of unemployment benefits and an extension of the so-called “Doc Fix” which will prevent a 27% cut in Medicare payments to doctors. I regret as much as anyone that the Senate could not agree to a long-term plan. Now a last minute compromise between the House and Senate is the only way to avoid raising taxes on American families. A yearlong extension of the payroll tax holiday would provide families and small businesses with much greater certainty than just a two-month extension. However, the clock is ticking down. I have no faith that Harry Reid and Nancy Pelosi will be willing to put aside partisan differences to return to Washington and negotiate a long-term solution. We are now in a position that requires all options to be on the table, that requires Republicans to not only demand a willingness to compromise, but to offer it as well.
Mr. Speaker, our democracy was built on compromise. Through compromise the Congress grew our Nation from 13 colonies to 50 states, funded two World Wars, righted the wrongs of segregation, and put a man on the Moon. Compromise has always been at the core of our Nation. Surely now the Congress can come together and reach a compromise on extending payroll tax relief.
More often than not an “all or nothing” attitude produces nothing. An “all or nothing” attitude is not what my constituents need now. My constituents need a Congress that is willing to put all options on the table, even those that are not yearlong plans, to avoid higher taxes on more than 160 million Americans.
Mr. Speaker, we have nine days. Let’s get to work and show my constituents in Arkansas and all Americans that this Congress can put people before politics.
Sincerely,
Rick Crawford
[Via Email]
The agreement reached is not everything I hoped for, but it includes the critical pro-jobs Keystone pipeline provision, relief to taxpayers and small businesses and requires the Senate to appoint negotiators so we can forge a year solution: I will support it.
Tim Giffin
[Via Email]
This is an important step forward to offering American families, businesses and workers some certainty in the coming year. This compromise paves the way for hundreds of Arkansas jobs for the Keystone XL pipeline, offers payroll tax relief to American workers and ensures that our health care providers continue to care for Medicare patients. While Congress will work on long-term solutions, American families deserve this compromise that is in the best interest of our immediate needs.
John Boozman
[Via Email]
Anyone who comes out so strongly one way one day and as strongly the next day in opposite way is crazy - businessmen and women need consistency, constancy - whatever one wants to call it we need to know what the rules of the game are and make those rules the same for everyone involved! That's all businessmen and women anywhere in the world asks of their govnment!
I am so sick of the lack of effective leadership in this Congress....the 2 month extension is a foolish bill and should not have been agreed to by the Senate Conservatives. The house conservatives were led in the wrong direction and the results are not good for the people or this country. They have kicked the can down the road again. Here is a portion of the letter sent to the Speaker by our own Congressman Rick Crawford....encouraging compromise----" Mr. Speaker, our democracy was built on compromise. Through compromise the Congress grew our Nation from 13 colonies to 50 states, funded two World Wars, righted the wrongs of segregation, and put a man on the Moon. Compromise has always been at the core of our Nation. Surely now the Congress can come together and reach a compromise on extending payroll tax relief.
More often than not an “all or nothing” attitude produces nothing. An “all or nothing” attitude is not what my constituents need now. My constituents need a Congress that is willing to put all options on the table, even those that are not yearlong plans, to avoid higher taxes on more than 160 million Americans."
- one thing he left out compromise has gotten us $15.1 Trillion debt, $1.8 trillion in annual deficit spending, and this compromise was nothing but a political football that leaders Speaker Boehner and Sen. McConnell are to weak to see. We need statesmen willing to take a stand and fight for the people's right to freedom and liberty not their own self serving interest!
Sick & tired of GOP leadership! that's an understatement! Get them all a real business
While I agree that with regard to the payroll taxcut, two months was inane. And why are we cutting the funds to a program, social security, which is relied on by so many people. Talk about robbing the future of seniors who were lead to believe by the people of America that if the followed the government laws and processes, they would have a future income. It appears that Obama want to destroy social security as he does everything else.
Recall America elected a "boy king" for president. Congress is not a business, it is not a church, it is not organization where there is a single leader -- it is a"congress" - group of beings representing their constituents and as our forefather had hope -- never reaching a solution. One way to stymy the growth of government was not agreeing - not having a leader. America is in the mess it is in because in the last hundred years of people trying to "get along" and advancing an agenda which regardless of the people in office leads to less choice and freedom for its citizens.
I agree we need statesmen but they will still be few and far between. Look around the people you know, the orgs you are in, etc. how many people do you know who could bear the burden of being a statesman. And as for the GOP leadership, it is easy to criticize and complain. In fact, I see a lot of complainers and few real people willing to make a difference by their actions. Even George Washington, the "father of our country," had to face down the complainers and street mobs in Philadelphia. Instead of running on -- the focus must be to stop the re-election of BHO and then to work to reverse the socialist trends. Hopefully, it is not too late
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