Friday, August 26, 2011

3% Withholding Rule From Payments for Goods and Services

A law scheduled to go into effect in 2013 requires federal, state, and local governments to withhold 3 percent from payments for goods and services.  The law would be a constant cycle because funds would br withheld one year, recouped the following year, but then also withheld again. 

Withholding funsa amounts to floating the federal government an interest-free loan.  Businesses would have 3 percent less to spend, affecting day-to-day operations and future growth.  State and local governments would stress their already strained budgets administering this program.

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