Madam Speaker, I thank the chairman for yielding. I am grateful for this opportunity to speak on my bipartisan, bicameral bill, H.R. 1393, the Mobile Workforce State Income Tax Simplification Act. Madam Speaker, the 10th Amendment gives…
Madam Speaker, I thank the chairman for yielding.
I am grateful for this opportunity to speak on my bipartisan, bicameral bill, H.R. 1393, the Mobile Workforce State Income Tax Simplification Act.
Madam Speaker, the 10th Amendment gives States the freedom to set their own public policy. It is important, however, that they do so in a way that does not infringe upon the Commerce Clause of the United States Constitution, which gives jurisdiction over interstate commerce to Congress.
With our constitutional mandate in mind, at a time of rapid expansion in our workforce and an increasingly global and mobile economy, it is incumbent upon Congress to simplify and ease the complex burden that is imposed on interstate commerce activity.
In my 25 years as an attorney and a small-business owner, I am uniquely aware of the task of complying with the complexities of the various State income taxes, especially when you travel to another State for business.
The burden to comply is a particular burden to small businesses, as well as their employees, because they simply do not have the resources and cannot absorb the compliance costs. As a result, the current tax framework puts smaller businesses, the very backbone of our economy, at a substantial competitive disadvantage relative to larger businesses.
And complex reporting requirements punish the employees, too. The time and overall expenses that result from filing all of this paperwork is overwhelming, and, in many cases, financially devastating. It is all because they had the audacity to work outside of their home State.
Rather than driving profits back into their businesses and community by expanding payrolls and reducing the price of consumer goods, businesses are being forced to spend their hard-earned, scarce resources on complying with a menagerie of convoluted and ridiculous State income tax laws.
While crafting this legislation in committee, we heard a lot of anecdotal information and a lot of personal testimonials. In fact, we heard firsthand testimony from an employee, indicating that his employer had to file over 10,000 W-2s on behalf of their numerous employees, primarily because they had crossed State lines for work. He went on to tell us one of his coworkers had to file 50 W-2s--that is 50 W-2s--just for himself.
That didn't make sense to us, and it certainly doesn't make sense to most Americans. Imagine an individual, making less than $50,000 a year, having to file 10, 20, or even 50 W-2s. It is ridiculous, and it is unacceptable.
Madam Speaker, I am an ardent defender of the United States Constitution--in particular, the 10th Amendment--which delegates authority not granted to the Federal Government, to the States.
That said, the Constitution gives plenary jurisdiction to Congress relative to the regulation of interstate commerce, under Article I, section 8. It is, therefore, as in this case, the constitutional responsibility of Congress to identify and respond to an increasingly mobile and global economy and relieve it of unnecessary burdensome compliance requirements resulting from a patchwork of unique State income tax laws.
And that is why many groups that advocate on behalf of States, such as the American Legislative Exchange Council, agree with this legislation, because H.R. 1393 is the type of simple and streamlined interstate commerce regulation Congress should be enacting. In fact, there are more than 300 outside organizations that have encouraged support of this bill.
With the help of my colleague, Hank Johnson, on the other side of the aisle, our Mobile Workforce State Income Tax Simplification Act is a carefully crafted, bipartisan, and bicameral measure that streamlines State income tax laws across the Nation.
It creates a uniform threshold, giving nonresidents 30 days to work in another State without being liable for that State's income tax. This simple and straightforward language ensures employees will have a clear understanding of their tax liability, and it gives employers a clear and consistent rule so that they can plan and accurately predict their tax liability, knowing the same rule applies for all States with an income tax.
It also means much less paperwork and reduced compliance costs for both States and businesses and their employees.
The goal of H.R. 1393 is to protect our mobile workers, and that includes traveling emergency workers and first responders; trade union workers; nonprofit staff; teachers; Federal, State, and local government employees; and much more. Any organization that has employees who cross State lines for temporary periods will benefit from this law.
I would also note that great care was taken with this bill to diminish the impact on State revenues. You heard testimony earlier relative to its impact on State governments. In fact, a 2015 study by Ernst & Young found that H.R. 1393 would actually raise State income tax revenues, while other States would only see a de minimis change.
With that said, I would like to take this time to thank all of the members of the Mobile Workforce Coalition who support our bill; Chairman Goodlatte and his world class staff for all of their work; my 57 colleagues who cosponsored this in the House; as well as Senator Thune, Senator Brown, and nearly half of the United States Senate who have cosponsored our companion bill.
Madam Speaker, as Congress continues to work on comprehensive tax reform to jump start our economy and to provide relief for American families and businesses, the Mobile Workforce State Income Tax Simplification Act is a great start to streamline the Tax Code and roll back unnecessary and costly administrative burdens.
With so much red tape interwoven in today's Tax Code, this bill is a commonsense way to cut through the clutter and simplify part of the filing process moving forward. Together, we can make our workforce the priority and help our small businesses grow and prosper.
Madam Speaker, I strongly encourage my colleagues to support H.R. 1393.