Press Releases

Simpson, Labrador Vote to Repeal 1099 Requirements for Small Business under Obamacare

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Washington, March 3, 2011 | comments
“The entire health care bill needs to be repealed, but while we wait for the U.S. Supreme Court to bring the case forward and rule on its constitutionality, this requirement must be repealed immediately,” said Simpson. “The Democrat health care bill contains expensive and burdensome regulations on small businesses that they cannot afford. We should repeal this excessive reporting provision immediately and continue to work on full repeal so we may focus on promoting measures that would encourage small businesses to grow and create jobs.”
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 Idaho Congressmen Mike Simpson and Raul Labrador joined their colleagues in passing H.R. 4, the Small Business Paperwork Mandate Elimination Act. H.R.4 will repeal the IRS expansion of information reporting requirements for payments of $600 or more to corporations included as part of the Democrat health care plan.  The bill passed the U.S. House of Representatives today with a final vote of 314-112.

“The entire health care bill needs to be repealed, but while we wait for the U.S. Supreme Court to bring the case forward and rule on its constitutionality, this requirement must be repealed immediately,” said Simpson. “The Democrat health care bill contains expensive and burdensome regulations on small businesses that they cannot afford. We should repeal this excessive reporting provision immediately and continue to work on full repeal so we may focus on promoting measures that would encourage small businesses to grow and create jobs.”

“The repeal of the 1099 health care reporting mandate closes a chapter on one of the more illogical, poorly thought out elements of a thousand page bill that no one had read a year ago.  If someone had taken the time to read it before voting on it, they would have realized this provision of the president’s health care law created a mountainous bureaucratic burden on all existing small businesses and a crippling obstacle for any new start up business in trying to comply with it,” said Labrador. “This single provision stands as a prime example of an administration that does not understand business nor has any experience in creating the necessary environment in which businesses can create jobs.”

The Internal Revenue Service’s own National Taxpayer Advocate highlighted several problems with this requirement in a recent report stating that the new reporting burden, particularly as it falls on small businesses, may turn out to be disproportionate as compared with any resulting improvement in tax compliance. The report further stated that small businesses that lack the capacity to track customer purchases may lose customers, leaving the economy with more large national vendors and less local competition.

The National Federation of Independent Business says this provision, which was created without any input or discussion from the small business community, will have a “direct negative impact on small businesses.” 

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