[Congressional Record Volume 156, Number 123 (Tuesday, September 14, 2010)]
[Senate]
[Pages S7051-S7052]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              1099 MANDATE

  Mr. McCONNELL. Mr. President, over the past year and a half, I have 
tried to highlight some of the things the Democratic health spending 
bill does to undermine the health care system in this country. But one 
of the things the American people might not realize is that the 
consequences of this bill reach far beyond health care.
  As a way of helping fund their health spending bill, Democrats 
inserted a backdoor tax known as a 1099 mandate that forces small 
businesses to bear the burden of their plan. It mandates that every 
business and charity in the country submit 1099 forms for transactions 
totaling $600 or more, including routine business expenses such as 
phones, office products, and shipping costs. It could increase 
businesses' reporting requirement by as much as 2,000 percent.
  Even the White House now admits they went too far and that their 
health spending bill hurts small businesses. Predictably, however, 
their remedy is to raise taxes. This is one more way Democrats are 
holding back the economic recovery--by socking businesses with another 
mandate that costs them thousands of dollars a year in the middle of a 
recession.
  Ironically, the IRS says they will not even be able to handle the 
paperwork this mandate would generate. They also say it is likely they 
will improperly assess penalties they will have to abate later.
  The Democratic Senator from Florida has put forth an amendment we 
will be voting on later today that aims to help small businesses get 
around this reporting requirement. The problem is the Nelson amendment 
only covers some small businesses and fails to address the root of the 
problem.
  Under this amendment, for example, businesses with 26 or more 
employees would still be subject to mandates for transactions totaling 
$5,000 or more. Not only would hundreds of thousands of businesses 
still have to deal with this costly and burdensome new mandate, many 
others would presumably stop hiring once they reach the magic number of 
26 employees in order to avoid paying the new expense. Moreover, the 
Nelson amendment does nothing to alleviate the paperwork nightmare, and 
it is paid for with yet another major tax increase.
  Senator Johanns has proposed a better approach. Unlike the Nelson 
amendment, the Johanns amendment fully repeals the 1099 mandate and 
would halt the Democrats' backdoor attempt to further place the costs 
of their health care plan on the backs of small businesses. It 
eliminates the paperwork for all businesses instead of picking winners 
and losers.
  The Johanns amendment also has broad support. It has been endorsed by 
the Coalition for Fairness in Tax Compliance, the U.S. Chamber of 
Commerce, the National Federation of Independent Business, the American 
Farm Bureau Federation, and the Americans for Tax Reform. It has 
bipartisan support in the Senate as well.
  This is a strong amendment that will actually help small businesses 
without

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hurting others. I will be voting for the Johanns amendment and against 
the continuing costs and mandates of the Nelson amendment. I urge my 
colleagues to do the same.
  I yield the floor.

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