House overwhelmingly approves repeal of 3% withholding law for federal contractors
October 27th, 2011
12:46 PM ET
3 years ago

House overwhelmingly approves repeal of 3% withholding law for federal contractors

Washington (CNN) - The U.S. House voted Thursday to repeal a tax withholding measure for government contractors that never took effect.

Under the measure repealed by the 405-16 vote, all bills paid by the federal government for goods, services or property after January 1, 2012 would have been subject to a 3% tax withholding.

The original provision was a revenue-raiser inserted into the Tax Increase Prevention and Reconciliation Act signed by President George W. Bush back in 2006 with the intention of ensuring that contractors hired by the government paid what they owed in taxes.

However, widespread opposition by contractors, President Barack Obama and both parties ensured the measure's repeal. The House repeal now goes to the Senate, where Democrats and Republicans have differed on how to pay for it.


Filed under: Congress
soundoff (8 Responses)
  1. diridi

    We need to get these federal contractors, on H1B visas, they are hiring for cheap labor, and letting them go unnoticed, ultimately these foreigners are breaking the contract and joining in BCBS which is a greedy insurance company in here, for cheap labor. Thus, they are breaking the immigration law, and Federal government is not doing any thing at it. We need stringent immigration measures on these, with these federal government contractors. o.k, Watch out these H1B visas...god bless....

    October 27, 2011 12:59 pm at 12:59 pm |
  2. Rudy NYC

    If Republicans want to trade new spending for cuts in existing spending, then I say trade one revenue stream for another. This repeal reduces revenue, so come up with something to replace that revenue. Otherwise, you are simply increasing deficits and debt.

    October 27, 2011 01:02 pm at 1:02 pm |
  3. Rudy NYC

    diridi wrote:
    We need to get these federal contractors, on H1B visas, they are hiring for cheap labor, and letting them go unnoticed,
    -------
    You sound as bad as "Democrat Class Warfare". It is not that easy to employ undocumented workers on federal contracts. In fact, it is rather difficult to do without falsifying documents and other illegal acts. Even if you succeed in getting an undocumented worker on your payroll, most federal contracts stipulate that you must pay your workers "prevailing wages" and you must show proof of conformance, otherwise your contract is terminated, your bond is forfeited, and then you are prosecuted, convicted, fined, thrown in jail, and banned from bidding on future government contracts.

    In other words, it really isn't worth the risk to hire undocumented workers under most federal contracts.

    October 27, 2011 01:17 pm at 1:17 pm |
  4. ConservaFASCISTS/TEAliban/TEAhadists

    Wow! Something the most dysfunctional Congress EVER has accomplished together.

    October 27, 2011 01:24 pm at 1:24 pm |
  5. Joe Y.

    Apparently those who have posted before me are incapable of reading an entire article. This law never took effect so there is no loss of revenue...also, I work for a federal contractor and I promise you I do not need a visa to work in this country as I (like most of my co-workers) was born in this country.

    October 27, 2011 01:26 pm at 1:26 pm |
  6. MTATL67

    TO JOE Y. – "The original provision was a revenue-raiser inserted into the Tax Increase Prevention and Reconciliation Act signed by President" The bill passed and Bush signed it. That made it the law.

    October 27, 2011 01:37 pm at 1:37 pm |
  7. Democrat Party - leftist "progressive" socialist communist losers hellbent on destroying the USA

    If Obama and the dummies in his administration stop defrauding the tax payers with loans to their campaign supporters (Solyndra!), we wouldn't need any new revenue sources to fund their incompetence and/or theft.

    October 27, 2011 02:05 pm at 2:05 pm |
  8. Democrat Class Warfare

    I, for one, am happy to see both parties working together to cut taxes on our job creators.

    October 27, 2011 02:19 pm at 2:19 pm |