This week the House will vote on HR 4 which would eliminate the requirement that 1099s be filed on transactions of $600 or more. It is expected that this will pass the House but will fail in the Senate because of how HR 4 pays for the lost revenue.
I told you previously that the Senate passed a similar bill but paid for it by using authorized expenditures in the budget. It did not say exactly what those expenditures were.
Small Business California supports HR4. We also support the Senate bill. At the end of the day we are sick and tired of politics and don’t care how it is paid for. Just do it.
See below Administrative Policy
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
March 1, 2011
STATEMENT OF ADMINISTRATION POLICY
H.R. 4 – Comprehensive 1099 Taxpayer Protection and
Repayment of Exchange Subsidy Overpayments Act of 2011
(Rep. Lungren, R-California, and 273 cosponsors)
The Administration strongly supports efforts to repeal the provision in the Affordable Care Act that established information reporting requirements for tax purposes that place an unnecessary bookkeeping burden on small businesses. The Administration is committed to reducing the gap between taxes legally owed and taxes paid, but believes that the burden created on businesses by the new information reporting requirement on purchases of goods that exceed $600, as included in Section 6041 of the Internal Revenue Code as modified by Section 9006 of the Affordable Care Act, is too great.
However, the Administration has serious concerns about the approach the Congress has taken to paying for the repeal. The Administration strongly opposes the House’s offset to pay for this repeal in H.R. 4, which would undo an improvement enacted with nearly unanimous support in the Medicare and Medicaid Extenders Act that eliminated an egregious “cliff” in the tax system affecting middle income taxpayers. Specifically, H.R. 4 would result in tax increases on certain middle-class families that incur unexpected tax liabilities, in many cases totaling thousands of dollars, notwithstanding that they followed the rules. The Administration also notes that a provision repealing the same information reporting requirements in the FAA Air Transportation Modernization and Safety Improvement Act would pay for the repeal with an unspecified rescission of $44 billion that, in combination with other proposals currently under consideration in Congress, could cause serious disruption in a wide range of services provided by the Federal government.
The Administration looks forward to continuing to work with the Congress on the repeal of the information reporting requirements in the course of the legislative process, including finding an acceptable offset for the cost of the repeal.
Tuesday I spoke at a Department of Workers Compensation conference about the trends in Workers Compensation. A Workers Compensation Rating Board representative was there and gave two pieces of interesting information. The preliminary projections of combined loss ratio for 2010 is 127%.
The increase in premiums for 2010 was just over 2%. Clearly there is pressure to increase rates but it is not clear if the will happen in July or January 2012.
Small Business California
2311 Taraval Street
San Francisco, CA 94116