A key Senate Democrat announced Friday that he would introduce legislation to repeal a provision in the recently-passed health care reform law that would eliminate an overly-burdensome reporting requirement for small businesses that might have left many drowning in paperwork.
Senate Finance Committee Chairman Max Baucus, D-Mont., released a statement saying, "I have heard small businesses loud and clear and I am responding to their concerns."
The Patient Protection and Affordable Care Act (PPACA) contains a provision designed to raise revenue without raising tax rates, that would, beginning in 2012, require all businesses to report payments to and purchases from any business totaling more than $600 in a calendar year, regardless of what the money was used to purchase.
The Baucus legislation would strip the requirement from the bill entirely, but it will also leave a major hole from the revenue lost. The nonpartisan Joint Tax Committee estimated that $19 billion could be expected over 10 years.
Small business owners and their advocate groups have canvassed Capitol Hill for months decrying the provision which was designed to reduce the sizable "tax gap" between what individuals and businesses owe the IRS and what they actually end up paying. The IRS estimates that the government loses more than $300 billion each year from noncompliance.
But Baucus said small businesses "need to focus their efforts on creating good-paying jobs - not filing paperwork."
I love the last line from Baucus. It hits straight to the heart of the problem with that provision.
It will be interesting to see if this gets passed. If it does, it'll open the door for the Republicans to pass similar legislation next year that will further gut out more provisions out of the bill, in an effort to neuter the bill.
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