Congress works to cut down business paperwork, at the expense of health care

A tax file with the word "taxes."

TEXT OF STORY

JEREMY HOBSON: Last night, the Republican-dominated House of Representatives voted to 'nix' the new healthcare reform law. And that's the end of the line for repeal because Senate Democrats and the President have vowed to shut down the effort. Opponents of the law can now try to knock off individual provisions they don't like. Republicans are looking specifically at a tax-reporting requirement for businesses that's designed to raise revenue to pay for reform.

Marketplace's Mitchell Hartman has more.


Mitchell Hartman: This is the kind of regulation businesses love to hate. Starting next year, they'll have to file a tax form for every supplier they spend at least $600 with, on everything from computers to carpet cleaning.

Tim Reynolds: Last year, we filed only seven 1099 forms. If the law were in effect, we'd file 200.

Tim Reynolds runs a software firm in Cleveland and he's got 35 employees -- one of whom does nothing but federal 'form-filing.'

Reynolds: Think of it this way -- it's a 2,700 percent increase.

All those extra 1099s are supposed to help the IRS catch tax-cheats, and raise $17 billion. Reynolds, who's on the board of the National Small Business Association, doesn't think so.

Reynolds: Spread that across the millions of small businesses -- that's a heck of a paper flow that the IRS is going to have to handle, and their costs are going to go up.

In keeping with his push to reduce business paperwork, President Obama now supports 1099 repeal. So do some Democrats, though they don't want to cut health care to pay for it.

I'm Mitchell Hartman for Marketplace.

About the author

Mitchell Hartman is the senior reporter for Marketplace’s Entrepreneurship Desk and also covers employment.

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