Wednesday, March 30, 2011

What's holding up 1099 enhanced reporting repeal?

Everybody, literally everybody, in DC says that the ridiculous expansion of 1099 reporting has to be repealed.  But no one wants to actually do it.  Evidence? The ongoing kabuki over how to "pay for" the repeal.  See if you can understand this, from Tax Notes ($):
Menendez's language would task the Department of Health and Human Services with studying the offset in the Johanns amendment to determine if it would raise health insurance costs for small businesses or cause them to cut coverage. If so, then the offset provision would be blocked from going into effect. 

Johanns's offset would raise money by increasing the recapture rate for a health insurance tax credit enacted in the 2010 healthcare reform law. Some Democrats have objected to the offset, saying it would raise taxes on middle-income earners. The House and Senate have each passed separate legislation to repeal the reporting requirements, but a deal to reconcile the two bills has been elusive. 
Does that make any sense?  These are entirely hypothetical future provisions, which will might or might not raise some amount of revenue based upon some undisclosed econometric model, and we have to hold up the repeal to see if some other model predicts adverse behavioral response? 

Obviously none of these tax writers are serious. Or maybe they really are serious about retaining the 1099 provision while being able to deny responsibility for it, in which case they are dishonest.  Boy, I miss the Rostenkowski days.  Heck, I even miss Wilbur Mills!

1 comment:

JLM said...

Me too!