H.R. 4 repeals a small but onerous provision in the health care law that requires business owners to file a separate 1099 tax reporting form for every company with which they do more than $600 worth of business in a given year. This is a particularly devastating provision for small businesses because, according to estimates by the National Federation of Independent Businesses (NFIB), the cost of tax compliance is two-thirds higher for small companies than for large ones. Interestingly, small businesses are responsible for two-thirds of new job creation.
“A bookbinding business in Denver, Colorado would see an increase in 1099 filings from less than a dozen last year to more than 1,000. The business does not have an in-house accountant and would have to consider hiring a part-time employee just to complete the forms. The owner said, ‘If I have to hire a part-timer, I don’t want them filling out government forms, I want them to be binding books.’”
- National Federation of Independent Business
“Imagine picking up donuts every Friday for your staff meeting and then having to send the donut shop a 1099. Or how about a 1099 for your cell phone bill. Does the U.S. Post Office get a bill if we use over $600 a year in postage?”
- John C. Gregory, U.S. Chamber of Commerce
“A 2005 study published in the Annals of Family Medicine estimated that paperwork, or documentation, takes up as much as a third of a physician’s workday. Physicians already deal with piles of charts, and encounter … billing forms from innumerable insurance companies, which takes away from their time with patients. Under Section 9006, more 1099 reporting forms will be added to that paperwork burden.”
- American Medical Association
The President voiced support for my legislation during his State of the Union address in January, making it the first repeal of any part of his health care law that he supports. Early this week, with repeal of Section 9006 imminent and lending momentum to scrutiny of the health care law, the Administration reversed itself on another provision of the health care law, saying it will now support state waivers beginning in 2014 rather than 2017 as the law currently provides.
Here we see a good model of new governance. Local stakeholders alerted Congress about the real world effects legislation would have on their ability to conduct business and create jobs. Members of Congress were attentive and responsive (in fact, 272 Members co-sponsored the repeal). Rather than being centered on partisanship, Washington for once was centered on solutions. Congress should continue this model for a new era of attentive, responsive, effective governance. I remain committed to striving for this goal in my work for you.
Sincerely,
Dan Lungren
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