It seems only appropriate to offer a health care policy recommendation on the day that U.S. District Court Judge Roger Vinson has handed down his ruling on Obamacare – after all, we need to keep reminding the public about the the many negative effects this bill will have on the economy. Therefore…
Suggestion #18: End the 1099 reporting requirements.
Until recently, businesses only had to file 1099 tax reporting forms for contract workers. Beginning in 2012, however, all companies must file a 1099 form for all individuals and businesses from whom they purchase $600 or more in goods and services – thanks to an overlooked provision buried in the health care reform bill.
“Wait,” you may say. “This has nothing to do with health care reform! How the heck did this get in that bill?” Well, funny you should ask…
See, even though it’s not 100% related to health care specifically (hey, neither was student loan reform, but who’s counting), the 1099 provision was included in order to raise revenue. Back in 2009, President Obama said that his goal was a bill around $900 billion – so it was imperative to make the bill *look* like it came in at the right figure. The Congressional Budget Office estimated that this will raise $17 billion over ten years – and every penny counts!
Unfortunately, the paperwork burden that this provision places on small businesses is enormous – and will have an impact beyond just the money that the government will raise from additional taxes on small-ticket transactions. The more time businesses have to spend tracking their expenditures, the less time they have to spend on growing and improving their businesses – hurting the nation’s long-term economic growth. And let’s be honest – do we really think the IRS has the manpower to properly evaluate the massive amount of paperwork this is going to generate?
In last week’s State of the Union address, the President touched on the need to reform the health care bill, stating “We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses.” While excitement runs high today over Judge Vinson’s ruling, it is important that we continue moving forward to reduce the regulatory burden on small businesses. Ending the 1099 reporting requirements should be a top priority for Congress.