[Congressional Record (Bound Edition), Volume 156 (2010), Part 11]
[Senate]
[Pages 15279-15280]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       1099 REPORTING REQUIREMENT

  Mr. ENZI. Mr. President, I rise to express my concerns about a 
provision in the new health care law that will impose monumental 
burdens on small

[[Page 15280]]

businesses, reduce wages and eliminate jobs.
  A provision that was included in the new health care law will require 
businesses to submit new tax forms every time they purchase more than 
$600 worth of goods. This new government mandate will impose 
significant new costs on 26 million businesses across America.
  Given the economic challenges that our Nation already faces, this is 
a burden that we cannot afford. If it is not fixed, this new mandate 
will slow economic growth and prevent the creation of new jobs. The 
Commerce Department reported last week that the pace of economic growth 
is slowing down. U.S. economic growth slowed to an annual rate of 2.4 
percent in the second quarter, the weakest showing in nearly a year. 
According to the Labor Department, wages and salaries are also 
suffering and the unemployment rate still hovers around 9.5 percent.
  If these numbers are going to improve, it's going to be a result of 
the hard work and ingenuity of our Nation's small business owners. The 
entrepreneurial small business community has been the driver to pull us 
out of all recent recessions. They are the key to job creation that 
will pull us out of this economic downturn as well. Small businesses 
create 65 percent of all new jobs in America. In Wyoming, that number 
is a lot higher. We have 62,000 small businesses in Wyoming that employ 
nearly 70 percent of our workforce. We need to advance policies that 
encourage small businesses to grow and hire new workers.
  Unfortunately, buried in the new healthcare law is a provision that 
will have the opposite effect. It will cost every business, even the 
smallest of the small, more money to file their taxes.
  Because of the new healthcare law, beginning in 2012 businesses will 
have to send new tax forms to the IRS for every business to business 
transaction of $600 or more for both goods and services. This new 
requirement creates a punishing new paperwork mandate for small 
businesses.
  The new paperwork requirement means that a small business owner will 
have to file two forms--one to the vendor and one to the IRS--for 
almost every purchase his or her business makes. Imagine you're a 
freelance writer and you buy a new laptop. Well, now you have to send 
Form 1099 to Apple and the IRS or, be labeled a tax cheat. Oh, and 
you'll need Apple's Taxpayer Identification number too so don't forget 
to ask the salesman for that.
  Complying with the tax code is already one of the most expensive 
burdens placed upon small businesses. According to the National 
Federation of Independent Businesses, the typical small business pays 
as much as $74 per hour to prepare and file various tax-related 
documents. Because they cannot afford to have their own finance 
departments, the costs of complying with the Federal tax code are 66 
percent higher for small businesses as compared to their larger 
competitors. The new healthcare law will significantly increase these 
tax burdens and the costs that come with them.
  This new reporting requirement hits small businesses hardest because 
they typically don't have in house accounting departments and have to 
hire outside help. Every penny a small business spends on these 
services is money they can't spend on hiring new workers and expanding 
their business. Every hour a small business owner spends filling out 
these new tax forms is time he or she is not making a sale, 
manufacturing a product or working with a customer.
  I understand the challenges this can create for a small business. 
Before I came to the Senate, my wife and I started and owned several 
shoe stores back home. When you own a small business, you have to be 
the CEO, the bookkeeper, the salesman and the person who empties the 
trash and cleans the toilets.
  Every hour that I spent filling out government-mandated paperwork, 
was an hour I couldn't spend selling shoes. Government mandates, like 
the new 1099 requirement, have a real cost, and it is small businesses 
who end up having to pay them. The National Taxpayer Advocate, based 
inside the IRS, has already warned of the new reporting burden on small 
business.
  This new reporting requirement hurts small businesses at the same 
time our economy needs them to help our recovery. Small businesses 
across this country are still struggling to stay open. Rather than 
forcing these businesses to comply with burdensome new paperwork 
requirements, we should be finding ways to encourage them to reinvest 
their money in growing their businesses and hiring more workers.
  Our country has always relied on small businesses to grow the economy 
and create new jobs and they have always been the drivers to pull us 
out of economic downturns. Given the still difficult challenges facing 
our economy, the last thing we should be doing is piling on the 
paperwork that takes their time and precious resources away from 
creating jobs.
  I believe things like the 1099 requirement are causing our 
entrepreneurs to think twice about taking new risks for fear of more 
government burdens and regulations. That's the worst thing Washington 
should be doing right now. Instead, we need to be focused on creating 
an environment where small businesses can grow and aren't worried about 
what might be the next new burden thrown on them from Washington.
  It seems like a reoccurring bad dream around Washington over the past 
few years. Washington politicians tuck something into a giant bill 
that's rammed through Congress without fully understanding the impact 
in the real world.
  This 1099 reporting requirement is just one of the many things in the 
new health law that need to be re-examined. Our small businesses need 
to be focused on creating jobs and helping our economy recover, not on 
new paperwork burdens. When a business is considering making new long 
term investments in employees or equipment, they shouldn't have to be 
worried about the next new wrinkle to be uncovered in the health reform 
law.
  We can make a statement right now to America's small businesses that 
we want you out there creating jobs, hiring new employees and growing 
your business--not worrying about what Washington will require of you 
next. Let's tell our small business men and women that we stand behind 
them, not on top of their backs, and let's repeal this new tax 
paperwork burden. Mr. President, I yield the floor.

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