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Office of the Press Secretary

For Immediate Release June 9, 1995


With the goal of reducing government's burden on small business owners and individuals, President Clinton and Vice President Gore today (6/9) announced initiatives that will significantly streamline wage and income reporting requirements and eventually lead to a system of single electronic filing with federal and state governments.

"For years, small and big businesses, and concerned citizens across this country, have been telling Washington to 'get real' about the absurd, frustrating, and costly paperwork burdens that have been placed on them. The system that's set up now is very convenient for the government. Now it's the government's turn to be convenient for business owners and taxpayers," the President said.

The Vice President said, "We are getting rid of management practices and structures that were right for the industrial age, and bringing things up-to-date with the information age. We are taking quality lessons from America's best run businesses."

Joined by Department of Treasury Secretary Robert Rubin, Department of Labor Deputy Secretary Thomas Glynn, Social Security Administration Commissioner Shirley Chater, and Internal Revenue Service Commissioner Margaret Richardson, as well as delegates from the White House Conference on Small Business, the President outlined two proposals aimed at reducing the burden on small business owners and individuals when reporting wages and income to the federal and state governments:

The Small Business and Simplified Tax and Wage Reporting System (STAWRS) will simplify tax compliance and payroll recordkeeping regulations, judged the most burdensome concern of businesses with 10 or fewer employees -- or about 79 percent of American businesses. The initiative will eventually enable employers to file W-2 data through single returns electronically with both the federal and state governments, and simplifies the laws, definitions and procedures related to tax and wage reporting.

Treasury Secretary Rubin, Deputy Labor Secretary Glynn, SSA Commissioner Chater, and IRS Commissioner Richardson signed a Memorandum of Understanding to implement this initiative, which, when fully implemented, is expected to save employers about $1 billion annually in tax and wage reporting costs.

FedState Partnership programs will further eliminate duplicative tax requirements and eventually allow taxpayers to satisfy both their federal and state filing obligations with a single electronic transmission. The initiative also calls for the Internal Revenue Service (IRS) and state tax agencies to work together to provide taxpayers filing assistance and enhance outreach educational programs for the elderly, new business owners and other groups.

Twenty-nine states participated in joint electronic filing in 1995, and the program will expand to 32 states in 1996. The President announced he will send legislation to Congress to allow further growth in the FedState Partnership programs, which is now hampered by current disclosure and appropriation laws between the federal government and the states. The initiative is estimated to reduce the burden to taxpayers by $1.5 billion.

Secretary Rubin said, "For years, prior Presidents said they would reform government, but they produced only reports. President Clinton is producing results."

Today's announcement is part of the second phase of the National Performance Review (NPR), which already has saved more than $63 billion of NPR's $108 billion in proposed savings, and resulted in the reduction of more than 102,000 FTEs of 272,000 FTEs targeted over five years.