Democrats Want to Repeal Part of Health Care Law

Congress Attempts to Fix Clause in Health Care Law That Would Create More Tax Paperwork for Businesses, But Can't Agree How

(AP)  Talk about a paperwork nightmare: Tucked into the massive new health care law is a demand that nearly 40 million U.S. businesses file tax forms for every vendor that sells them more than $600 in goods.

House Democrats now want to repeal it. Republicans, too. But nothing is that simple in an election year.

The latest effort was expected to come to a vote late Friday.

The goal of the provision was to prevent vendors from underreporting their income to the Internal Revenue Service. The government must think those vendors are omitting a lot because the filing requirement is estimated to bring in $19 billion over the next decade.

Businesses already must file Form 1099s with the IRS when they purchase more than $600 in services from a vendor in a year. The new provision would extend the requirement to the purchase of goods, starting in 2012.

The requirement would hit about 38 million businesses, charities and tax-exempt organizations, many of them small businesses already swamped by government paperwork, according to a recent report by the National Taxpayer Advocate. It would also create an avalanche of paperwork that could strain the IRS itself, wrote the advocate, an independent watchdog within the IRS.

Businesses that repeatedly make small purchases from the same vendor would have to keep good records in case the total exceeded $600 in a year. Companies would also have to get vendors' tax identification numbers to include in the filings.

"Tax paperwork and compliance are already major expenses for small businesses," a coalition of 80 business groups wrote in a recent letter to lawmakers. "This new and expanded requirement means that almost every business-to-business transaction is potentially reportable to the IRS."

Lawmakers have heard the complaints.

"This 1099 reporting was a well-intentioned provision to try to catch people who were cheating on their taxes," said Rep. Scott Murphy, D-N.Y. "But it has some unintended consequences in my opinion that will create a lot of extra work and hassle for our small businesses."

However, repealing the requirement would come with a cost: the $19 billion in lost revenue over the next decade. Making up for that is where Democrats and Republicans part ways.

Republicans want to repeal the filing requirement and pay for it by changing other parts of the new health care law, a strategy that Democratic leaders won't support. Democrats want to repeal the filing requirement and pay for it by raising taxes on international corporations and limiting taxpayers' ability to use special trusts to avoid gifts taxes. Republicans won't support that.

House Republicans tried to do it their way by amending an unrelated tax bill late Thursday. House Democratic leaders responded by shelving the bill.

House Democrats unveiled their version of a bill to repeal the filing requirement Friday morning. A vote was expected late in the day, just before the House went on summer vacation. Though the Democrats hold a majority in the House, prospects for passage were uncertain because they brought up the bill under a procedure that requires a two-thirds majority for approval.

"Frankly, this is a missed opportunity," said Rep. Dave Camp of Michigan, the top Republican on the tax-writing House Ways and Means Committee. "It is a missed opportunity to fix a fundamental flaw in the health care law and a missed opportunity to truly help American employers and the jobs they provide."

[RobAla]

So, why didn't the Democrats read the bill prior to passing it? I think any representative who votes on legislation without first reading it, should be fired. Hopefully, we can do some of this firing come November.

Repeal part of it piece meal? NO - repeal the entire stupid bill!!!!

[RickChicago1]

Another Liberal idea that is financially unworkable, was not thought out, had zero chance of achieving even the Liberals objective, would hurt the economy, and was not read by any of the Liberal quacks that voted for this trainwreck. We as a country will be "discovering" these little hidden gems for years as these Socialist laws come into force.

[tarbox55]

Repeal ALL or nothing.

[tsigili]

That's what happens, when you allow unrelated things to get into bills.

[cleric60]

Talk about a paperwork nightmare: Tucked into the massive new health care law is a demand that nearly 40 million U.S. businesses file tax forms for every vendor that sells them more than $600 in goods.
QUESTON: Where were the Democrats Senators and Representatives when this bill was being read?????
They were too busy to even read this bill entirely. SAD!
But, hey we have a national health care plan in the USA.

[Harden_Tar]

Don't sweat it Democrats, it will get repealed soon enough.

[stormerF3]

Now the DOJ in an attempt to thwart the lawsuits being brought agaisnt the mandated insurance requiremnets this bill call for, are calling them taxes on individuals,when Obama said it again and again there would not be any new taxes to pay for this. Bill has insane requirements for small businesses and the Democrats wonder why they are not hiring, Guess the Democrats should have read the bill,probably has some more AIG bonuses hidden in there some place.

[msjb12]

I sure hope Its changes so the politicians can share in our fine healthcare package I would sure hate to see such fine people miss out on such a deal for healthcare for each of them. remember we will have to read it later to see how many mistakes we made in it, remember we are only politicians as you all know.

[wfw3536]

Maybe the democrats should read the bills first. Before it passed and they were in such a hurry they bragged that they could always fix it later, but they did not have time to let anyone read it. I hope they take as much of the money that it will cost business out of anyone who voted for it out of their salaries. How sad it is that we have these folks and their too lazy to read these bills.

[stormerF3]

No,No Princess Pelosi said we have to pass this bill to find out what is in it,Because we are too stupid not to have written it in plain enough english to understand. Now it begins to bite them in the butt and they deserve it. REPEAL THE BILL.

[variablespanner]

Stormer -- your version of plain English is why so often you complain the courts are activist. If the laws were more specific there would be less room for the courts to maneuver. the same Plain English you desire often leaves loopholes for fraud and abuse too.

[RobAla]

REPEAL THE ENTIRE STINKING HEALTH CARE BILL!!!

Americans were asking Washington to help bring down the cost of health care, but instead Washington took this as an opportunity to fatten itself at our expense. This bill will cause premiums to go up dramatically, and the higher taxes will result in our standard of living going down. Washington turned a deaf ear to the majority of Americans, and we will have an opportunity to set things straight come November.

[david4673]

Wrong.