Small Business Paperwork Mandate Elimination Act of 2011

Floor Speech

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Mr. NEAL. I thank Mr. Levin for yielding the time.

Mr. Speaker, this provision came over from the Senate. As Mr. Levin has correctly noted, Members on this side of the aisle have already cast a vote to repeal this measure. The difficulty that's in front of us today is the manner in which this has been presented to all of us.

Now, we are going to hear a lot of conflicting opinions today about the new taxes in this bill. Like everybody else here in this Chamber, I am opposed to raising taxes on the middle class. Hardly is that a leap of faith into unchartered waters. We all share that common belief.

But the problem with the provision that's offered today is the disguised nature of raising taxes on the middle class. Let's get to the heart of this bill. It repeals a new reporting requirement on small businesses.

This provision expanded a type of reporting that already goes on where businesses report to the Internal Revenue Service on large payments sent to contractors. This type of third-party reporting is meant to ensure those contractors report honestly to the IRS on the income they earn.

A reminder, it is estimated that there is up to $300 billion a year of unreported income in the United States. And before we get to some of the cuts that have been proposed in this institution, we ought to be focusing our attention on how we might collect that unreported and underreported income that is such an important part of the underground economy in the United States.

You would think that that opportunity would avail itself based upon the mindless process that took place here a couple of weeks ago where we began with a series of 2-minute votes over 2 days to cut very important initiatives that the American people have come to rely on. And I would suggest to my friends on the other side of the aisle that they take note of that Wall Street Journal poll this morning as to what these cuts mean and how they are going down with the American people.

In our committee markup, there was a great deal of discussion about the burden on small businesses that this new reporting requirement imposes, and I think that for the most part we are all in agreement that the burden here may well outweigh the benefit.

But let's not ignore what we have found out about tax evasion at our markup. I asked Tom Barthold from the Joint Committee on Taxation about his estimate that the reporting requirement would raise $22 billion in revenue. Now, Tom Barthold is not a Democrat; he is not a Republican. He is an economist who likes to give unjaded information to those of us who then implement policy.

I asked him how much of this was tax evasion, contractors underreporting income and how much was the penalties on those innocent third parties who got tripped up on the rules. He told us that almost all of it was due to tax avoidance, tax evasion.

So without any hearings or debate about how to best capture that $22 billion, we eliminated this reporting requirement and would raise taxes on middle-income families.

I want to urge my friends on the other side, before we travel down this path of cutting very important initiatives for the American family--and I can't wait till we have the first vote in this institution up or down on Social Security to see if the rhetoric really matches the reality. Then I am hopeful that if we move to the discussion and debate on Medicare, we will see if the rhetoric matches the reality.

But I would hope that before we move on this mindless trail of these proposed cuts that have taken place over the last 3 weeks, that we might consider what to do about the whole notion of tax evasion. I hope that those on the other side of the aisle would join me in my efforts to ferret out tax abuse.

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Mr. NEAL. I have been on this issue for a career of what to do about American companies that change their address so that they become a citizen of Bermuda to avoid American income taxes, while there are hundreds of thousands of American soldiers overseas, why our VA hospitals are going to be necessary for the 31,000 that have been wounded in honorable service to this country, and why, before we propose the cuts that we have proposed, we are not after tax evasion the way that we should be. That ought to be something that men and women of good will in this institution all ought to be able to agree upon.

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