Key House member joins campaign to repeal withholding tax.(EXTRA CREDIT)

NACM has learned some good news regarding its campaign to repeal a recently enacted 3 percent withholding tax on the value of most federal and state contracts as well as those with larger local political subdivisions. U.S. Rep. Wally Herger, (R-CA), is planning to introduce a bill that would repeal this new withholding tax provision regarding payments on government contracts. This would compliment a bill on the Senate side, S. 2821, sponsored by Sen. Larry Craig, (R-ID).

The 3 percent withholding tax was included as Section 511 of H.R. 4297, known as the Tax Increase Prevention and Reconciliation Act of 2005 (EL. 109-222,), which President Bush signed it into law on May 17, 2006. Sen. Craig introduced his bill to repeal the tax on the same day.

Daniel Maclean, Legislative Director for Rep. Herger, said he expects a bill to be introduced by his boss by press time of Business Credit magazine. Maclean said the post-Labor Day Congressional session would be short this year because of the November General Election. Therefore, his office will be working hard to get a bill drafted before the end of the session. Maclean said he did not know if the bill would be a companion bill to Sen. Craig's legislation, or if it would be different in language, but both are still designed to accomplish the same thing--repeal of the 3 percent withholding tax. Lisa McGrath, Economic Policy Advisor to Sen. Craig, said her office is working closely with Herger's office on the matter.

Legislation pertaining to taxes usually emanates from the House Committee on Ways and Means and Rep. Herger is not only a member, but the Chairman of the Ways and Means Human Resources Subcommittee. Therefore, he would be an influential member of Congress to help get the legislation out of the committee and on to the floor of the House for a final vote. Maclean acknowledged that the odds are long for such legislation to be passed this year. However, he pointed out that Congress could be called in for a lame duck session after the General Election and it would be possible for Rep. Herger's legislation to move at that time. Even if that doesn't happen, Maclean noted that getting legislation introduced this session in Congress would be a good precursor for a more sustained effort during the next two-year session of Congress, which starts next January. NACM President Robin Schauseil, CAE stressed the importance of having perseverance in this campaign to repeal this new taxing provision. "We at NACM are in this campaign for the long haul," she said. "No matter how long it takes, we will work hard to get tax relief for those companies that do business with the government." Noting that NACM worked for several years for Bankruptcy Reform legislation to get passed, Schauseil said, "We will persevere and exhibit the necessary patience to see this legislative fight through to its ultimate victory." On the efforts NACM has made so far to enlist support for Sen. Craig's bill, McGrath said, "We absolutely ...