NCPA - National Center for Policy Analysis

Many Push For Repeal of Tax Provision in Health Law

September 14, 2010

Many Democrats have joined Republicans in pushing for the repeal of a tax provision in the new health care law that imposes a huge information-reporting burden on small businesses, says the New York Times.

  • To improve compliance, the law requires businesses to report purchases of items like office equipment, food and bottled water, gasoline, lumber and plumbing supplies if payments to any vendor in the course of a year total at least $600.
  • Businesses will, in many cases, also have to report payments for things like travel and telephone and Internet service.
  • Businesses denounce the requirement, and even the National Taxpayer Advocate at the Internal Revenue Service, Nina E. Olson, said the reporting burden might "turn out to be disproportionate as compared with any resulting improvement in tax compliance."

The White House is nervous about a repeal, fearing that it could set a precedent for rolling back other unpopular features of the law.  Moreover, the reporting requirement is expected to lead to a significant amount of revenue -- $17 billion over 10 years -- that will help pay for the expansion of health care coverage and other health initiatives, says the Times.  

The Senate is scheduled to vote on repeal as an amendment to a small business jobs bill soon after it reconvenes this week.  President Obama strongly supports the jobs bill, but he has not embraced a repeal of the reporting requirement, says the Times.

Source: Robert Pear, "Many Push for Repeal of Tax Provision in Health Law," New York Times, September 11, 2010.

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