What’s in a Legislative Bill Name?
Recently congress failed to repeal the highly controversial and irresponsible piece of the health care reform act that requires any company spending over $600 per year with any vendor to issue them an IRS 1099 at the end of the year. It is
When the health care spending bill was passed in late spring this tiny but expensive provision was tacked on to the 2,700 page healthcare reform act. Democrats so insistent on passing this legislation quickly didn’t examine this part of law that flew under the radar screen.
Many laws have riders attached to them that provide spending or taxing authorization for congress. That isn’t new. The 1099 provisions really didn’t have anything to do with healthcare, though later democratic senators said it was meant to pay for the increase federal healthcare spending.
The 1099 rider was proposed to make it easier for the IRS to catch small business taxpayers who were underreporting their business income. The congressional budget office estimated the new law would help catch approximately $17 billion of taxes caused by underreported income over 10 years. The IRS office estimated that the cost of collecting the $17 billion would be about $22 billion or a net loss to taxpayers of $5 billion over ten years.
Business taxpayer groups like the NFIB, and the U.S. Chamber of Commerce estimate the cost to collect these taxes in administrative and bookkeeping costs at about a billion dollars over the ten years.
During the summer as business taxpayers raised many questions about the wisdom of passing a law that would cost $5 billion more than it would bring in, congress in both parties vowed to repeal the law.
When congress was back on the very first day of their fall session last Monday they took up the repeal matter. Even though both democrats and republicans vowed to repeal the legislation, they could not agree whether to use the republican version of the repeal bill or the democratic version. So in the end the bad law currently stands. Democrats appeared to dig in their heals because they didn’t want any portions of the healthcare legislation chipped at with repeal legislation, and republicans weren’t motivated to push harder because they felt they could use the issue as fodder against democrats in fall reelection bids.
It seemed that neither party was necessarily interested in repealing bad law. When the partisan goal on both sides of congress is to make the other look bad for political purposes we the people aren’t being represented fairly.
The same sort of shenanigans are happening this week on three pieces of legislation that the democrats are pushing hard. 1) The repeal of the military “don’t ask, don’t tell” rule; 2) legislation known as the DREAM act (which involves illegal immigration); and 3) a campaign contribution disclosure law.
Democrats have tacked the first two laws on critical defense appropriations legislation. The third one is a stand-alone legislation. The democrats really don’t think they can pass any of the three bills, and in fact the repeal of the “don’t ask, don’t tell legislation failed early this week. The democrats are using these three issues to try to energize gay and Hispanic voters to get out and vote in November.
Whether you are in favor or against any of these laws is not the issue. The issue is the way both democrats and republicans are playing games with our laws and taxpayers.
To me, it feels that our congress is letting us down at a time when we need them to act on taxpayer behalf the most.
Sam Thacker is a partner in Austin based Business Finance Solutions.
You may contact him directly at sam@lesliethacker.com
Twitter: @SMBFinance
