Critical Condition

Repeal Obamacare’s 1099 Reporting Provision? No Way!

I probably should have weighed in on this issue a few weeks back, but the looming bipartisan repeal of Obamacare’s 1099 reporting requirement is nothing for Obamacare’s opponents to cheer.

The 1099 provision refers to the justly reviled clause in Obamacare (section 9006) that compels any business spending at least $600 on a supplier to issue a 1099 to that supplier. So, if my consulting business buys $600 worth of office supplies from Staples, I’m supposed to issue Staples a 1099!

It’s supposed to raise some tax revenue by giving the IRS more accurate information about business transactions, but it’s an easy target for a “mini-repeal” of an obviously ridiculous provision of Obamacare.

The House passed a short bill to repeal the reporting requirement on March 3 (with every Republican and 76 Democrats voting in favor), and the Senate has been tossing it around for a few days now. Although the Senate appears to want to move it to the president’s desk, certain senators have been trying to add unrelated amendments to it, so it hasn’t passed yet.

Nor should it. The 1099 reporting requirement kicks in at the beginning of 2012, just when the thousand-plus Obamacare waivers are expiring and their beneficiaries will be pleading for their renewal. The bureaucratic hassles of Obamacare will be back on the front pages. Although a nuisance, the 1099 reporting requirement will be the most obvious “cost” of Obamacare to millions of small businesses and sole proprietors as we go into the next campaign season.

Taking this off the table risks losing that community’s commitment to the complete defeat of Obamacare. Repealing the 1099 reporting requirement would be a Pyrrhic victory in the struggle against Obamacare — exactly the type of bipartisanship we don’t need.

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