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« OPINION: Super Committee | Main | Cain Plans Presser In Wake Of New Allegation »
Tuesday
Nov082011

Senate Repeals 3 Percent Witholding Tax

UPDATE: In a 94-1 roll call, the Senate nearly unanimously agreed to consider legislation that would jolt the economy for both America’s businesses and its veterans. 

The legislation will repeal a law requiring contractors to pay an immediate 3 percent in taxes when payments are recieved from federal, state and local governements. 

Contrary to a similar bill introduced in October that failed to garner Democratic support due to the inclusion of nearly $30 billion in distretionary cuts, this version clearly has the support to sail through the upper chamber. 

The Senate is expected to begin debate this week, during which Senate Democrats will attach language offering businesses tax credits as an incentive for hiring out of work veterans. 

This story was updated at 9:16a.m. EST…


WASHINGTON - The Senate plans to vote late Monday afternoon on a procedural vote to move forward on repealing a Bush-era tax accountability law that would allow governments at all levels to withhold 3 percent of pay to contractors. 

After passing the House in a landslide 405-16 vote, the repeal will likely see the same support in the upper chamber. 

The repeal, however, will be complimented with legislation that provides small businesses with tax credits for hiring veterans, a notion President Obama and Senate Democrats have pushed for on a week meant to commemorate the service of America’s veterans.

“Although our veterans are coming home with greater technical and leadership skills than ever before, those skills don’t always translate to civilian resumes,” Senate Majority Leader Harry Reid (D-Nev.) said on the Senate floor. “This program would help bridge that gap.”

If passed, that law would give employers up to $2,400 in tax credits for hiring veterans out of work for at least one month. That credit would double should employers hire veterans who have been out of work for 6 months or longer. 

According to Reid, the program extends its benefits to soldiers who have returned with physical and mental disabilities by providing a year-long vocational rehabilitation and other employment benefits. 

Legislators hope to combat the 12.1 percent unemployment rate among returning veterans with this legislation.  

The Senate is scheduled to vote on repealing the 3 percent withholding tax at 5:30p.m. EST. 

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