Senate fails to revise health care law provision
Senate Republicans focused their attention Tuesday on amendments to ease a requirement in President Barack Obama’s health care overhaul that businesses file tax forms called 1099s for every vendor that sells them more than $600 in goods. Business groups say it would create a paperwork nightmare for small businesses. Competing Democratic and GOP measures to address the matter each failed.
A bid by Sen. Mike Johanns, R-Neb., to repeal the reporting requirement failed, 46-52. Sen. John Ensign, R-Nev., voted for repeal while Sen. Harry Reid, D-Nev., voted against repeal.
The competing Democratic amendment was sponsored by Sen. Bill Nelson of Florida. It would have exempted businesses with 25 or fewer employees, and increased the reporting threshold to $5,000 for larger businesses.
The vote on the Nelson amendment was 56-42, short of the 60 necessary to advance. Reid voted for the amendment while Ensign voted against it.
Democrats had hoped to pass the bill in July, but Democrats couldn’t win any GOP converts and fell just short of defeating a filibuster that was called because Democrats blocked Republicans from offering unrelated amendments.
The small-business tax cuts in the bill include breaks for restaurant owners and retailers who remodel their stores or build new ones. Larger businesses could more quickly recover the costs of capital improvements through depreciation. Long-term investors in some small businesses would be exempt from paying capital gains taxes. And loan caps under the Small Business Administration’s chief lending program would be significantly raised.
The measure also would allow small-business owners to deduct the costs of health insurance for themselves and their families from self-employment taxes, but only for the 2010 tax year.
Much of the bill would be paid for by allowing taxpayers to convert 401(k) and government retirement accounts into Roth accounts, in which they pay taxes up front on the money they contribute, enabling them to withdraw it tax-free after they retire. Taxpayers who convert accounts this year would pay the taxes in 2011 and 2012, generating an estimated $5.1 billion.
The Stephens Washington Bureau contributed to this report.