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July 18, 2000

H.R. 1264 - Right-to-Know National Payroll Act
(Hoekstra (R) Michigan and 23 cosponsors)

The Administration opposes House passage of H.R. 1264. This bill would require employers to provide additional information on their employees' W-2 forms that is not necessary for tax filing purposes. This information is easily ascertainable from information currently found on W-2 forms; the employer share of old age, survivors, and disability insurance and hospital insurance taxes is identical to the employee share reported on the form. Providing this information would require altering W-2 forms and software, creating an unnecessary burden and imposing costs on employers, and modifying unnecessarily one of the most important parts of the tax-filing process without adding any value to that process. The Administration estimates that modifying the W-2 form in this manner would increase the paperwork burden imposed on all employers by almost 15 million hours. This burden does not account for the cost to employers of converting software.

Adding unnecessary information to the W-2 could also lead to transcription errors on 1040 tax forms. It would also make tax preparation more expensive and increase IRS processing costs. This legislation contradicts the goals of tax simplification and reduction of the employer compliance burden. In addition, this bill does nothing to improve the Social Security system or to improve the solvency of the Social Security Trust Fund. The Administration encourages the Congress to take steps proposed by the President to accomplish these important goals.