House Passes “Small Business Jobs and Credit Act”— Bill Likely to Have Same Success as Earlier Failed Initiatives
Sep 23, 2010 -
Congressman Jim Sensenbrenner (R-WI) today issued the following statement after the House voted to approve H.R. 5297, the Small Business Jobs and Tax Credit Act of 2010:
“President Obama and the Democratic Majority in Congress have implemented a number of programs designed to create jobs and aid small businesses. These programs have failed miserably. All they have done is add billions of dollars to the national debt.
“When Congress passed Obama Care earlier this year, a little-noticed (at the time) provision in the bill saddled small business owners with an onerous tax reporting requirement. The new requirement forces small businesses to file a Form 1099 with the IRS for every single business to business transaction exceeding $600. Instead of a common-sense approach that would repeal this requirement, the bill that the Democratic Majority in the House passed today actually increases penalties for failure to file the tax forms correctly.
“The IRS’ own National Taxpayer Advocate issued a report noting several problems with the provision, including that small business may incur additional costs for additional accounting services. The report also stated, ‘in our view, it is highly likely that the IRS will improperly assess penalties that it must abate later, after great expenditure of taxpayer and IRS time and effort.’
“Republicans attempted to work with the Majority to rectify the small business concern and repeal the burdensome 1099 requirements. Instead, the Democrats actually increased the penalties significantly, to the tune of $419 million. And while there may be $12 billion of temporary tax relief for small business, H.R. 5297 contains $14.5 billion in permanent tax increases. Adding insult to injury, the bill that now heads to President Obama’s desk for signature also expands the universe of transactions subject to the reporting requirements even further—the new requirement will increase taxes $2.5 billion.
“I agree with my Republican colleagues that we need to pass legislation to aid small business owners. These small businesses are the backbone of our economy. But this bill won’t do the trick. The American public has spoken loud and clear—they are sick and tired of Washington passing new bailout programs funded by the taxpayers. Programs like the ones in H.R. 5297 that are modeled after TARP don’t work and are not subject to stringent oversight. Congress needs to pass meaningful legislation that will help small businesses prosper and generate jobs for the economy.”