Hill Letter Regarding S. 3578, the "Small Business Paperwork Elimination Act"

The Honorable Mike Johanns
United States Senate
Washington, DC 20510

Dear Senator Johanns:

The U.S. Chamber of Commerce, the world’s largest business federation representing the interests more than three million businesses and organizations of every size, sector, and region, strongly supports S. 3578, the “Small Business Paperwork Mandate Elimination Act,” which would repeal the onerous paperwork burdens imposed on business by the ill-conceived expanded information reporting mandate contained in Section 9006 of the “Patient Protection and Affordable Care Act” (PPACA). This provision was used as an unrelated “pay for” in the PPACA and it should be rescinded based on the merits of the provision alone.

Unless this section is repealed, businesses across the United States would be subjected to data collection and information filing on virtually all business-to-business transactions they make aggregating $600 or more in a year at a time in which many can least afford it. When America is counting on the small business community to generate jobs and grow the economy, lawmakers are forcing small businesses to divert their precious time and resources to collect volumes of information and fill out mounds of new paperwork for the government.

If implemented, Section 9006 of the PPACA would also have a chilling effect on new business relationships, most of which would be small businesses and startups. Many businesses, in an attempt to reduce data collection and paperwork burdens, would simply reduce vendors and refuse to entertain new business dealings. This would have a disproportional impact on small businesses and entrepreneurs attempting to get a foot in the door.

The ultimate irony of these new burdens is that the IRS has neither the resources nor the ability to use the new information to reconstruct an accurate picture of a company’s revenues since a large volume of business-to-consumer transactions are not reported. While the vast majority of compliant taxpayers would bear the cost of implementing this law, it would have only minimal benefit as a government tool in reducing non-compliance.

Moreover, the U.S. tax system is only as strong as the willingness of its participants to voluntarily comply. Imposing vast new data collection and reporting requirements may be viewed by many small business owners as unreasonable and overreaching. In the end, this could serve to undermine confidence in government and further frustrate tax collection efforts.

Ninety-six percent of the Chamber’s members are small businesses with fewer than one-hundred employees. On behalf of its members, the Chamber thanks you for introducing S. 3578 and looks forward to working with you on this important issue.

Sincerely,
R. Bruce Josten