Republicans and the U.S. Chamber target new tax-reporting rule in health law

[The Northerner]

Sen. Mike Johanns (R-Neb.) this week continued his push to eliminate a controversial tax-reporting provision of the new healthcare reform law, vowing to offer his repeal bill at every turn.

“I will file this amendment on every viable vehicle that comes to the Senate floor,” Johanns said on Monday at a healthcare forum hosted by the U.S. Chamber of Commerce. “Sooner or later, we’ll get a vote and we’ll see who stands with our job creators and who does not.”

Under the Democrats’ new healthcare reform bill, companies, nonprofits and government offices are required to file 1099 forms with the IRS when goods purchased from another business exceed $600 in a year. Under previous law, the reporting requirement pertained only to services exceeding that amount.

The new mandate goes into effect at the start of 2012.

Conservatives on Capitol Hill have joined many in the business community in slamming the provision, arguing that it will hobble small businesses with onerous new paperwork mandates amid a fragile economy when the resources would be better spent hiring new workers.

“The most routine business expenses will be subject to this new burdensome paper trail,” Johanns said on Monday. “This mandate has nothing to do with improving the healthcare of this country and should not be part of this law or any other.”

Read more: http://thehill.com/business-a-lobbying/111005-gop-chamber-target-new-tax-reporting-rule

[mike_c]

1. what's the justification for the provision in the first place?

Anyone? I'm clueless about this one.

[alc]

4. I'd guess $17 billion dollars

I've read that the 1099 provision is expected to bring in $17 billion over 10 years.
Many things were added/removed at different points in the hcr process even though they were unrelated to health care. Anything that brought in revenue or decreased spending could be added to the bill to improve the CBO's cost analysis of hcr. I think college loan provisions were also added for this reason even though they were unrelated to the bill.

[mike_c]

5. then really, the debate about this has nothing to do with the health care reform bill....

This isn't a republican attack on the health care reforms-- it's a republican attack on a tax law that was simply added on to the health care bill for cosmetic reasons.

[joeybee12]

2. Well, we were told "they" were going to "fix" the bill after the passed...

Now we find out who "they" are and what the "fix" is.

[mike_c]

3. is this a bad thing?

I know, the tendency is to think that if an idea originates in the republican party it must be bad, but I'm at a loss about what this provision is intended to accomplish in the first place. Do you know why it changed the existing tax reporting laws? Is there a good justification for it, or is it just to make it easier for the IRS to go after small businesses?