Ways and Means passes repeal of tax provision

Business groups were also stridently against the provision, which was intended in part to help the government combat tax evasion. The Obama administration also targeted the provision in its jobs proposals.

Under the rule, federal, state and some local governments would be required to withhold the payments from contractors.

{mosads}In the end, eliminating the 3 percent rule was noncontroversial, as the repeal measure passed Ways and Means by voice vote after more than 60 percent of the House had signed on to it. House GOP leaders have said the repeal bill will get a floor vote by month’s end.

But a measure to amend Medicaid eligibility requirements, which is being thought of as a possible offset for the repeal measure, does not have quite the broad support.

Ways and Means also passed the Medicaid bill on Thursday, and Rep. Sandy Levin of Michigan, said he had concerns about using the measure to help pay for the 3 percent repeal.

“This is an offset that affects individuals, but it is being used to pay for the repeal of a provision that principally affects businesses,” Levin said in his prepared opening statemet. “This committee has a long, and appropriate, history of not asking individual taxpayers to shoulder the burden of business tax provisions.”

The Medicaid legislation would raise roughly $13 billion over a decade, while the 3 percent repeal would lead to the loss of about $11 billion in revenue over that same time span.