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Stop Job-Killing Energy Tax Hikes!
An Open Letter to the United States Senate
September 14, 2010
On behalf of the 362,000 members of the National Taxpayers Union (NTU), I urge you to oppose Senator Nelson’s amendment (SA 4595) to H.R. 5297, the Small Business Jobs and Credit Act. This amendment would impose harsh new taxes on American energy production by repealing the Section 199 domestic manufacturing deduction for major oil companies.
As you know, the new health care law contains a provision that requires companies to submit 1099 forms for goods or services purchased from a vendor for $600 or more. This would entail extremely burdensome regulations on businesses at a time when many are struggling amidst the dismal economic climate. While the Obama administration is hoping to bring in $17 billion of tax revenue from the compliance initiative, it would inevitably hurt small businesses that already face additional mandates and the fear of being forced to lay off workers; hardly a desirable outcome as the nation’s unemployment rate hovers around 10 percent.
We commend both Democrats and Republicans for standing up to this onerous modification, but are particularly concerned with Senator Nelson’s proposed approach. The Senator has introduced SA 4595 to scale back 1099 reporting requirements by exempting businesses with 25 or fewer employees and raising the payment threshold from $600 to $5,000. While we would like to see a push for full repeal of the aforementioned information reporting, the amendment’s offset provision is what makes it most troubling. SA 4595 would be “paid for” by completely eliminating the 199 deduction in the tax code, resulting in a significant and discriminatory levy on oil and gas companies. Increased costs would inevitably be passed down to consumers in the form of higher gas prices and electricity bills, and could also endanger many jobs connected with or supported by the industry. In addition, this punitive tax policy could further hinder our ability to bounce back from the current financial crisis – a liability our nation simply cannot afford.
For these reasons, we urge you to vote “NO” on the Nelson Amendment, SA 4595. All roll call votes related to this legislation will be significantly weighted in our annual Rating of Congress.