This was a vote on final passage of legislation repealing a provision of a major health care law enacted in 2010 that required small businesses to file a tax form (a 1099 form) for all individuals who had received $600 or more from a business in exchange for property or merchandise. This bill also cut subsidies provided by the health care law for uninsured Americans to purchase health insurance. The 1099 provision was included in the health care law to help raise tax revenue to pay for an expansion of insurance coverage. It later became widely viewed by members of both parties, however, as overly burdensome for small businesses.
The 2010 health care law subsidized the purchase of private health insurance by uninsured Americans by providing the uninsured with tax credits and deductions to buy insurance. This Republican-backed bill, however, effectively cut those subsidies by requiring Americans who received them to pay a tax penalty if their income for a given tax year was higher than initially thought. Under the bill, an uninsured person who qualified for a tax credit to obtain health insurance--but then received a pay-raise--would be required to pay a penalty. For example, if an individual earned $44,000 annually, he or she would be eligible under the 2010 health care reform law for tax credits to purchase health insurance. Yet if that person’s salary was raised, he or she would have to repay his or her full credit in the form of a tax penalty – effectively eliminating any subsidy for heath insurance.
Rep. Dave Camp (R-MI) urged support for the bill: “Today the House considers…legislation repealing one of the job-killing tax increases enacted in the Democrats' health care law last year. This legislation provides a pathway to achieving a goal that is shared by Republicans and Democrats in the House and Senate alike, and by the Obama administration--repealing the form 1099 reporting requirements enacted last year.”
Rep. Wally Herger (R-CA) supported the bill, and rebutted Democratic arguments that cutting subsidies for the purchase of health insurance amounted to a tax increase: “Getting rid of excess subsidies is not a tax increase. It's simply being responsible with the taxpayers' money….the American people have told us they want two things: more jobs and less spending. The bill before us advances both of these goals, and it deserves the support of every member of this House.’
Rep. Joseph Crowley (D-NY) opposed the bill: “I rise in strong opposition to this bill not because I oppose the repealing of the 1099 reporting requirements. I do. I have a record of supporting 1099 repeal and relieving America's small businesses from onerous paperwork and onerous regulations. What I'm opposed to is paying for this small business tax bill by increasing taxes on working middle class Americans. And that is exactly what this legislation will do.”
Rep. Lloyd Doggett (D-TX) criticized the bill: “If you have an employee who really shows ability and who may have a fairly menial or mundane job but who does it and does it with pride and does it well and if that employee excels and if the employer rewards him with a bonus…and then decides we're going to give you a little promotion and that you'll get a little more pay or, perhaps, as with so many families around this country, that employee decides `I'll never make it for my family on this. I'm going to moonlight. I'm going to take an extra job,' then…the Republicans today propose a penalty, a tax on success. At the end of that year, after those law-abiding employees have properly estimated their income from those 12 months earlier, if their pay has gone up a dollar over the level, they'll get a steep penalty. They may have to pay literally thousands of dollars back even though they only got a bonus of a few hundred dollars.”
The House passed this bill by vote of 314-112. All 238 Republicans and 76 Democrats voted “yea.” 112 Democrats—including majority of progressives—voted “nay.” As a result, the House passed legislation repealing a provision of a major health care law enacted in 2010 that required small businesses to file a tax form (a 1099 form) for all individuals who had received $600 or more from a business in exchange for property or merchandise, and effectively cutting subsidies for uninsured Americans to purchase health insurance.