Florida Probate Attorney and Florida Inheritance Lawyer Florida Probate Attorney Blog

Repeal of the new 1099 tax form burden sent to Obama to sign into law.

The Senate overwhelmingly and in a rare bipartisan manner voted Tuesday to repeal a part of the health care reform law that would require businesses to file a 1099 tax form with the government for every purchase they make over $600.

The requirement was designed to fight tax fraud and raise money for the health care reform plan Democrats passed last year. But it quickly became extremely unpopular. Businesses properly complained it would be a major nuisance that would substantially increase administrative time with paperwork and be a burden especially on small businesses.  

The Senate voted 87-12 for the repeal. Beyond enough to over ride a presidential veto if one were to occur and the House already approved the bill, so it will go directly to the president, who has not said definitively if he will sign the legislation.

The President and his administration as well as some Congressional Democrats, support the repeal, but disagreed with how the proposed legislation made up for the around $22 billion the Congressional Budget Offices claimed would be lost over the next 10 years to pay for health care reform.

Multiple sources from both parties said they anticipate the president to sign the repeal.

An assistant to Sen. Mike Johanns, Republican from Nebraksa, said the senator's effort to repeal the IRS reporting requirement always was aimed at easing the workload on businesses, not at taking a partisan whack at the controversial health care law.

White House Press Secretary Jay Carney, responding to passage of the legislation, said "We are pleased Congress has acted to correct a flaw that placed an unnecessary bookkeeping burden on small businesses," Carney said in a written statement. "And the administration remains eager to work with anyone with ideas about how we can make health care better or more affordable for all Americans."

Source: CNN - Ted Barrett

 

Bipartisan Senators propose deficit Summit

Bipartisan Senators Propose Deficit Summit

In a letter to President Obama this week, 32 Republican and 32 Democratic Senators proposed a budget summit to implement "comprehensive deficit reduction measures." Senators Michael Bennet (D-CO) and Mike Johanns (R-NE) were the leaders of the bipartisan group.

The letter noted that the Presidential Fiscal Commission had provided "an important foundation to achieve meaningful progress" on deficit reduction. Six senators (three Democratic and three Republican) have been working to develop an actual bill that would implement the recommendations of the Fiscal Commission.

The group of 64 senators now recommends that the President develop a comprehensive package that will attack the budget deficit. The comprehensive bill would include "discretionary spending cuts, entitlement changes and tax reform."

In the view of the bipartisan group of senators, a joint effort "would send a powerful message to Americans that Washington can work together" on deficit reduction.

  In a speech on March 21, Majority Leader Eric Cantor (R-VA) proposed both a reduction in the corporate tax rates and repatriation of corporate overseas funds at favorable rates.

Leader Cantor notes that the American corporate tax rates are "50% higher than even those in Europe." In his view, the international competition by multi-national companies has encouraged most European countries to reduce their corporate tax rates below those of the U.S. He suggests, "We must make America competitive again by lowering the corporate tax rate to at least 25%."

This would help to get companies like GE to keep more profits in the US and pay some taxes. 

The proposed corporate tax rate would be accompanied by comprehensive tax reform. In addition, Leader Cantor notes that there is "almost $1.2 trillion in overseas profits" that American companies are not returning to America due to the tax rate. He proposes that these funds be allowed to return to America at a lower tax rate.

Source: Washington Hotline March 2011 4th week. 

Obama says a Value Added tax is still on the table

As Yahoo News reports President Obama today directly experessed that a value added tax which is essentially a national sales tax at various times in the production of products is still being considered to generate more revenue for the governement. This would be a regressive tax and is unpopular with the senate expressing over 80% would not be in favor. It has been used in other countries in Europe but never seriously considered in the US but with the mounting deficit and significant spending the governemtn needs to continue to find additional sources of revenue.