Washington, DC – Today, Rep. Frank Kratovil backed bipartisan legislation to repeal onerous small business reporting requirements contained in the recently passed health care bill, which Kratovil had opposed in part because of its potential negative impact on small businesses and job creation. The provision, which will require all businesses to file Form 1099 paperwork with the IRS for every business-to-business transaction over $600, has been identified by numerous small business owners and advocacy groups as a major concern that could create unsustainable compliance and reporting costs for many small and medium-sized businesses. The legislation also closed tax loopholes that create incentives for companies to move their operations overseas, offshoring jobs in the process.
“I have heard from small businesses across the district concerned about this new reporting requirement. Today’s vote presented a clear choice between standing up for small businesses, or standing up for firms that are shipping American jobs overseas,” said Kratovil. “To me, that’s an easy choice. Congress should not be making things harder for the small businesses that will drive our economic recovery. Instead, today’s bill is a common sense approach to repealing these new complex compliance reports that would otherwise drain time, money, and manpower.”
The cost of tax compliance falls most heavily on small businesses. On average, small businesses spend more than $74 per hour on their tax compliance obligations, which represents the most expensive paperwork burden that the federal government imposes on small business owners. Small business owners typically lack in-house finance departments to track this kind of reporting. A Small Business Administration Office of Advocacy report found that complying with the tax code is already 67% more expensive for a small business than a large business.
The legislation is fiscally responsible and pays for itself by also closing tax loopholes for corporations that ship American jobs overseas and stick American taxpayers with the bill. The bill eliminates the foreign tax credit that was originally designed to prevent double taxation but has instead created economic incentives encouraging companies to move jobs offshore to avoid U.S. taxation. Foreign tax credit abuse is among the IRS’s top compliance concerns for large corporate taxpayers. In 2004, U.S. multinational corporations paid an effective U.S. tax rate of just 2% on their $700 billion of foreign active earnings.
“Companies that take American jobs overseas should not be able to benefit from tax loopholes that leave the American people picking up the tab,” said Kratovil. “By closing this loop hole we are taking the burden off the taxpayer and small business owners and putting it back on the large multi-national companies that are taking jobs overseas.”
Although a majority of members voted for this legislation, it failed to get the two-thirds support required to pass under the procedure with which it was considered. Despite this bill’s failure, Rep. Kratovil pledged his support to continue to fight for the offending provision’s repeal.
GMC says
Another free advertisement for Kratovil. And here we go again, having it both ways. He brags to his constituents about supporting this bill, and takes no responsibility for its failure to pass the House. Just like his position on the Health Care Reform legislation, having it both ways. Let’s wake up to his tactics. I’m a Democrat, but I certainly won’t vote for Kratovil again. He’s a huge disappointment.
Gren Whitman says
“Blue Dog” Frank Kratovil “forgot who brung him to the dance!”
He abandoned his president and his party on health insurance reform, but now expects Democrats to support his re-election.
In spite of free advertising provided by the Spy, Kratovil should not be surprised if “True Blue” Dems snub him this November.
Arf-arf!
thatguy says
Kratovil has to work both sides of the plate, in a district that is majority republican he cant please only democrats. This is known as representing the people, the job he was elected to do; not representing the party, the job most politicians sadly are expected to do these days.
Gren Whitman says
In response to “thatguy,” if Mr. Kratovil is honestly expected to work “both sides of the plate” (sometimes voting with Dems, sometimes with GOPhers), he should just quit the Democratic Party and identify himself as an independent (neither Dem nor GOP).
In a congressional district that “thatguy” claims is “majority Republican,” Mr. Kratovil should probably register as and run as a Republican. On matters of import — at least to this Dem — he already appears to be.
As Sen. Lindsay Graham says, “elections count,” and Mr. Kratovil ran — and won — with a lot of support from national, state, and local Democratic Party organizations. If he wanted this continue, it was reasonable to expect him to support proposals and programs that Democrats thought are important.
But he hasn’t, which puts Dems like me into a quandary.
Ex-Congressman Wayne Gilchrist aside, did “thatguy” happen to notice any other GOPher support for Mr. K?
Keith Thompson says
In response to Gren. Unless you’re a politician who is already established in the hearts and minds of his/her constituents (and not even guranteed in the case of say, Arlen Spector), registering as an Independent or even a third party is tantamount to political irrelevancy. The two-party system is so entrenched in American politics that it is practically impossible to run a viable campaign outside of the two-party system. A big part of the problem is that the Republicans and Democrats have actually rigged the rules to effectively make it impossible for anyone else to compete. The uphill battle that an independent or a third party candidate faces just to get on an election ballot (especially in Maryland) is usually enough of an obstacle to keep someone independent of the two parties from running. Such a candidate will find it easier to be a “renegade” within a particular party than go the independent or third party route (former Libertarian Ron Paul is a primary example). I contend that this country would be better off to have a wide variety of political voices whether its Independents, Libertarians, Greens, etc., but it is not within the best interest of the two major political parties to allow that to happen. The sad part to me is that I firmly believe that the majority of citizens in this country have political beliefs that fall in the middle of the two parties and yet they are virtually unrepresented due to the political stranglehold of the D’s and R’s.
Gren Whitman says
After I registered to vote in Maryland, as “undeclared,” I quickly realized that the Old Line State is heavily Democratic, and many district elections are decided in the Democratic primary, not the general.
Naturally, I wanted (a) my vote to count, (b) my voice to be heard, and (c) my actions noticed, so I re-registered as a Democrat.
Let’s face it: Kratovil’s a “DINO” (Democrat in Name Only).
In Maryland, I think Rep. Donna Edwards comes closest to representing me, but I don’t live in her district. Overall, my true rep is the Peach State’s Hon. John Lewis!
Sadly, I live in Rock Hall and have to settle for Dino Kratovil, and he has to suffer me as a loudmouth constituent.
Of course, in the general election this November, between the mutt and the nut, I’ll pick the mutt.
Keith Thompson says
Gren, you’re doing better than me. I can only think of one person in Congress that comes close to representing my political views and that’s Ron Paul. I will say that I do like my rep in Delaware, Mike Castle (who’s running for Joe Biden’s Senate seat), largely because he is a moderate who doesn’t fall lock step in line with all of the negative (in my view) tendencies of the Republican Party (breaking ranks with the Republican party on the Terri Schaivo case a few years ago as a prime example). If I lived in Kent County where I work, I wouldn’t have a problem voting for Kratovil nor would I have had a problem voting for Gilchrest. I have met both men and I’m impressed with their integrity and their intelligence. I also like the fact that both of them seem more interested in doing what they think is best for their constituents rather than toeing the party line. I wish more members of Congress were like them.
Chesterbridge says
I’m a Republican I like Kratovil. It seems like we always want thoughtful, reasonable people to be elected and then we tear them apart from both sides.
I have an issue with this article.
It says “The legislation is fiscally responsible and pays for itself by also closing tax loopholes for corporations that ship American jobs overseas and stick American taxpayers with the bill. The bill eliminates the foreign tax credit that was originally designed to prevent double taxation ”
That sounds like a talking point. Further, the first sentence is plural (“tax loopholes”) and the second speaks about “the foreign tax credit.” Which one? There were at least 9 totally different tax changes in that bill.
The bill was a sham in the sense that the lead sponsor, Rep. Levin (D-MI), the House tax panel chairman, had already used the same tax changes to make sure another bill “paid for itself,” H.R. 5893.
Compare for yourself: H.R. 5982 (IRS changes) and H.R. 5893 (the real Levin bill).
Levin knew only one would pass–the big ticket H.R. 5893, aka “tax extenders.” The votes were even both on Friday and the outcome was a foregone conclusion.
In other words, the IRS bill was a set up.
Kratovil has co-sponsored an important thing for small business. Thankfully the Senate will probably pass it and send it down the road into law since the House vote was an obvious sham. However, shouldn’t this paper provide links and bill numbers so we can follow the story ourselves?
Chesterbridge says
One more issue with the “facts” of this article. The article says the legislation was bipartisan. Actually, it has 21 co-sponsors. all of which are Democrats. During the vote, only two Republicans supported it.
I support the legislation’s goals–repealing a part of the new healthcare law which is unduly burdensome on small business. The bill is similar to a Republican bill which would do the same thing, H.R. 5141, sponsored by a California Republican. All of these bills are publicly available at https://thomas.loc.gov by the way.