These questions are culled from phone calls, letters, faxes and e-mails sent to Rep. Gallegly's Thousand Oaks, Solvang, and Washington offices. Each week Rep. Gallegly adds another question and answer. Please add your comments.
March 4, 2011
Question: How did you vote on H.R. 4, the Small Business Paperwork Elimination Act?
Answer: I voted for H.R. 4 when it passed the House of Representatives by a bipartisan vote of 314 to 112 on March 3, 2011. H.R. 4 would eliminate a provision in the Pelosi health care law that created new, burdensome tax-reporting requirements for businesses.
Under the law, businesses must issue an IRS Form 1099 for any payments to corporations and for any payments for property that exceed $600 per year. This requirement will impose a major tax compliance burden on small businesses, forcing them to divert resources away from job creation and expansion.
Even the Internal Revenue Service's National Taxpayer Advocate highlighted several problems with the 1099 mandate, including stating that "small businesses that lack the capacity to track customer purchases may lose customers, leaving the economy with more large national vendors and less local competition."
In addition, this is the first time that Form 1099 requirements have been imposed on taxpayers who are not engaged in business activity. Individuals and families that rent real property – a vacation home, a condo, or even a spare bedroom – for even just a few weeks or months out of the year, must now comply with complex new filing requirements for everyone to whom they pay more than $600 in a year (e.g., plumbers, lawn services, pool cleaners). And unlike the provision in the health bill, which does not become effective until 2012, this expansion took effect on January 1, 2011.
H.R. 4 repeals this provision while helping to prevent waste and fraud. The health care bill provides billions of dollars each year in subsidies for individuals who earn up to 400 percent of the federal poverty level and if individuals receive too much money from the taxpayers, they are only required to repay some of the overpayment. This may actually encourage some individuals to understate their incomes to receive extra subsidies. H.R. 4 would require individuals to repay the taxpayers if they receive unjustified subsidies.
For more information on my positions on economic issues, please visit my Economy issues page.
For previous Questions of the Week chronologically and by topic, please see my Questions of the Week page.
