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Health care law's massive, hidden tax change

Posted on May 7, 2010 by Kendall Harmon

An all-but-overlooked provision of the health reform law is threatening to swamp U.S. businesses with a flood of new tax paperwork.

Section 9006 of the health care bill — just a few lines buried in the 2,409-page document — mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year.

The stealth change radically alters the nature of 1099s and means businesses will have to issue millions of new tax documents each year.

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Posted in * Culture-Watch, * Economics, Politics, --The 2009 American Health Care Reform Debate, Economy, Health & Medicine, Taxes

6 comments on “Health care law's massive, hidden tax change”

  1. DonGander says:
    May 7, 2010 at 3:58 am

    Congress is trying to regulate America while not showing any ability to regulate itself.

    Don

  2. sophy0075 says:
    May 7, 2010 at 7:36 am

    The money that will have to be spent just to comply with this small part of the new law will be that much less money that companies can use to hire new workers, increase the pay/benefits of existing workers, purchase new equipment, lease new space, build new facilities –

    in short, this is but one other way that this law is a disaster for the US and our economy.

  3. dwstroudmd+ says:
    May 7, 2010 at 8:01 am

    Gee. Whodda thunk it! It was passed by Congress, after all. The same guys who don’t keep their special status under the new rules.

    Awwwwwwwww.

  4. robroy says:
    May 7, 2010 at 9:18 am

    I couldn’t tell if there was a small business exception. It doesn’t appear so. :^(

  5. Katherine says:
    May 7, 2010 at 4:45 pm

    This is insane. I wonder if this was slipped in to prepare for the VAT which the Presidential Commission is likely to propose?

    Repeal.

  6. Branford says:
    May 7, 2010 at 10:45 pm

    And from Fortune magazine:

    Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill’s critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.

    That would dismantle the employer-based system that has reigned since World War II. It would also seem to contradict President Obama’s statements that Americans who like their current plans could keep them. And as we’ll see, it would hugely magnify the projected costs for the bill, which controls deficits only by assuming that America’s employers would remain the backbone of the nation’s health care system.

    Hence, health-care reform risks becoming a victim of unintended consequences. Amazingly, the corporate documents that prove this point became public because of a different set of unintended consequences: they told a story far different than the one the politicians who demanded them expected. . .

    The fines for not providing employee health care will be less than the health care costs under the new legislation. Call me a conspiracy theorist, but I think for some legislators this is a feature, not a bug. This is a drive towards single payer – “My company doesn’t offer reasonable health coverage – the government must step in and help!”