Business Owners Urge 1099 Repeal, Tax Relief
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"I keep coming to D.C. because citizen advocacy is our right and privilege," says Laura Wilson. "Lawmakers need to hear from real people on how their actions affect the real world." Photo: Ian Wagreigh
Business owner Laura Wilson is no stranger to Washington, D.C., or the U.S. Chamber. “This is my third fly-in with the Chamber in the last two years,” says the owner of Pyramid Services Inc., a government services contract company based in Asheboro, North Carolina.
But the fly-in she participated in on September 15 may be the most important yet. Wilson and a group of other midsize company representatives on the Chamber’s Corporate Leadership Advisory Council (CLAC) flew to D.C. the same week that Congress returned from its August recess. They came to speak directly to their elected officials about preventing card check legislation from resurfacing, extending the 2001 and 2003 tax rates, and repealing the 1099 IRS reporting mandate that was hidden in the health care law.
For Wilson, the 1099 reporting mandate will impose substantial paperwork burdens on her business. She estimates that the new regulation, which requires a business to file 1099 reports with the IRS anytime it spends more than $600 over the course of a year with another business on goods and services, will increase her 1099 reporting by 500%. Wilson says, “Despite the fact that I have sophisticated systems in place, we’d still have to track and figure out whom we have information for and whether we’ve reached the $600 limit.” She says that her message to legislators is simple: “I would argue for simplicity of existing regulations, not additional ones. The more ‘reform’ you implement, the more taxes you raise, the more you hold back business.”
Wilson is also concerned about the expiration of the 2001 and 2003 tax cuts and the subsequent tax increases that would result. For the first time in her company’s 20-year history, she took a dividend this year, primarily because she’s worried that the dividend tax rate will increase from the current 15% to as high as 39.6% in 2011. “I would rather leave that money in my company and let it grow,” says Wilson. “But we’re practicing defensive business these days. We are making decisions not based on what grows our business but simply in defense of what we think is going to happen in Washington.”