• Large Businesses Already Dressing Up for Halloween as Small Government Contractors

    This is pretty nitty gritty, so stay with me: A three-percent withholding tax on U.S. government contracts became law back in 2006. It was supposed to come into effect in 2011, but 2009 stimulus bill delayed it to 2012. The withholding tax was created to "encourage businesses hired by governments to comply with tax law." And here I thought laws were supposed to encourage businesses to comply with laws.

    It just so happens the only part of the Obama jobs plan Eric Cantor supports is repealing the three percent withholding tax

    The House will vote this month on repeal of a 3 percent withholding tax on U.S. government contracts as Republicans seek "areas of commonality" with President Obama on ways to jump-start the economy, House Majority Leader¬†Eric Cantor said…

    Cantor said "you will see as the bill comes forward" how the repeal would make up the lost revenue.

    The three percent withholding tax is very controversial and it would cost billions of dollars to implement. One of the major arguments for repealing the tax is small businesses would have to "pay relatively more to comply with the withholding requirement."

    And who isn't a fan of small businesses? Mom and Pop contractors are my favorite kind of contractors, with their home-spun wisdom and platefuls upon platefuls of Werther's originals! Without a doubt though, my favorite thing about Mom and Pop contractors is how they are sometimes just fronts for large corporations

    Small government contractors often violate regulations by passing on most of the work and profits to large businesses, a practice that crowds out legitimate small businesses from the federal market, according to a House oversight panel Thursday.

    This doesn't mean the three percent tax shouldn't be repealed. The ideal fate of the three percent tax is a very complicated matter. This just serves a reminder that we are living in a world built on confusing lies. Like in The Matrix! FUN!

    Photo by Scott J. Ferrell/Congressional Quarterly/Getty Images

    Tags: Barack Obama, Eric Cantor, House of Representatives, Unemployment


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