Repeal this!

President Obama received rousing applause Tuesday night in his State of the Union address when he called for bipartisan agreement on repealing one part of the Affordable Care Act:

“We can start right now by correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small businesses. “

All members of Congress stood up to applaud because, while the public in general might not have understood the specific issue, Congress and many small businesses understood.

The 1099 part of the ACA requires a business to report payments made for over $600 for goods and services to the IRS using a 1099. This idea started in the last Bush administration to uncover income not being reported by businesses to avoid taxes. The concept found its way into the ACA as a way to generate about $19 billon more dollars to help pay for the provisions in the Act.

The burden for a small business, if this 1099 provision should be allowed to go into effect in January of 2012, would be tremendous. Plus, there are serious doubts that the IRS could handle the amount of information that would flood the agency for it to actually be used to identify businesses owing taxes.

Democrats, Republicans, independents, the President….everybody wants to repeal this 1099 provision. Democrats tried to put the repeal in the extension of the Income Tax Cuts legislation during the recent lame duck session but were rebuffed by GOP negotiators.

The biggest problem (other than partisan politics) in repealing the measure is money. Where does Congress come up with the $19 billion it is projected the government would lose in taxes so as not to increase the deficit?

This week Senators Reid, Baucus and Landrieu introduced a legislation to repeal the 1099 reporting requirement. So where is similar legislation from the majority party in the House?

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