After digesting the 2,000 page health care bill, legislators and pundits realized it contained numerous problematic provisions, specifically, the 1099 reporting requirements for small businesses.
Tomorrow the Senate looks to remedy this oversight by passing one of two amendments, SA 4596, proposed by Senator Johanns (R-Neb), or SA 4595, proposed by Senator Bill Nelson (D-Fla.).
Americans for Tax Reform President Grover Norquist sent a letter to the Hill urging Members to support Senator Johanns’ proposal and oppose Senator Bill Nelson’s.
While both amendments look to remedy the burdensome 1099 reporting requirements imposed on small businesses by the Patient Protection and Affordability Care Act, they achieve this goal in markedly different ways.
To fund exemptions for some small businesses, Senator Nelson’s amendment repeals the Section 199 manufacturing deduction for the nation’s leading oil and natural gas companies. Enacted in 2004 to foster domestic job creation and economic growth, Section 199 allows American companies to deduct a portion of their income derived from domestic production and manufacturing activities. Repealing this job creating tax rule is an effective tax increase on an industry that indirectly or directly employs over 9 million workers and adds over a trillion dollars to the American economy.
Conversely, Senator Johanns’ proposed amendment reduces government spending by cutting unnecessary programs and uses the savings garnered to exempt small businesses from the onerous 1099 reporting requirements.