Senate Dems look to target cheats in tax rule repeal

The withholding provision was enacted in 2006 to help prevent tax cheating among contractors. But implementation of the rule, now set to go into effect in 2013, has been pushed back a couple of times, and business groups have repeatedly pressed lawmakers to repeal the provision.

Senate Democrats had already indicated that they wanted to attach a package of incentives meant to boost veterans’ employment to the 3 percent repeal measure, which sailed through the House in late October. 

{mosads}But unlike other recent jobs measures, Democrats have not proposed paying for the veterans proposal with a surtax on millionaires. 

Senate Republicans have been united in their opposition to President Obama’s full $447 billion jobs package and certain planks plucked from it. But Senate Minority Leader Mitch McConnell (R-Ky.) said Tuesday that he was glad to see Democrats move forward with the veterans proposal, and Sen. Scott Brown (R-Mass.) has already announced that he will support the measure.

The president’s broader jobs plan took aim at the 3 percent provision and unemployment among veterans.

The U.S. Chamber of Commerce is among the groups pushing for the Senate to act on 3 percent repeal, which easily cleared a procedural vote in the Senate on Monday.

“Failure to repeal the provision will hit small businesses the hardest, taking valuable money from their local economies and sending it to Washington,” Tom Donohue, the Chamber’s chief executive, wrote in a Tuesday blog post.

Reid, meanwhile, has long said that he wanted to make sure that contractors who evaded their taxes did not get a free pass. And some Democrats have not embraced the Medicaid offset, even though it has the backing of the White House.