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Free Enterprise: House Small Business Leader Calls For Tax Extension, Spending Restraints

Washington, D.C., Nov 29 -

Congress should provide small business owners with certainty and extend the Bush tax rates for everyone, according to House Small Business Ranking Member Sam Graves (R-MO).

“What the American people want is certainty, including dealing with the 2001-2003 tax policy,” Graves told members of the U.S. Chamber’s Small Business Council on November 16. “Hopefully, we’ll get that done before Christmas. But if not, then we’re going to deal with that right after we get sworn in and we’ll make it retroactive right back to the first of the year.”

The sticking point, Graves said, is whether to extend the rates or make them permanent. President Obama has said he wants to make middle-class reductions permanent but has rejected calls to do the same for small business owners and other individuals making more than $200,000 a year and married couples making more than $250,000. “We’re pushing for a full permanent provision for everybody,” Graves said.

One hurdle to overcome is the administration’s misperception that increasing the tax rate would not impact small businesses. “They don’t think that that many small businesses file their income taxes individually or as a couple, which is frustrating,” Graves said.

Graves, who is up against Ohio Congressman Steve Chabot to become the chairman of the House Small Business Committee, said the House Republican leadership is currently in the process of selecting leaders, including committee chairs. Once those positions are decided, committees will likely spend the first half of next year holding oversight hearings to question administration and agency officials on a number of issues, including meeting government contracting requirements for small business set-asides.

Lawmakers will also continue to push for full repeal of the 1099 reporting provision included in the health care reform bill passed earlier this year, Graves said. That mandate, which is scheduled to go into effect in 2012, requires businesses to file a 1099 form with the IRS for non-credit card purchases from other businesses totaling $600 or more per year. “The administration just doesn’t understand how costly and how much of a headache that provision is,” Graves said. He dismissed legislation that would partially repeal the provision or raise the reporting threshold. “We don’t want a partial repeal, we want full repeal.”

Congress will also look at ways to reign in government spending, Graves speculated. "I'm sensing a real move towards restraint among the American people and recognition that there's going to have to be some cutbacks. And that's a good thing. We have a real opportunity here to see some important spending reforms."