What: All Issues : Fair Taxation : Corporate Tax Breaks, General : HR 5297. (Small business tax incentives) Motion to bring debate to a close on an amendment that would repeal a tax-related reporting requirement included in the 2010 health care overhaul/On the cloture motion (2010 senate Roll Call 231)
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HR 5297. (Small business tax incentives) Motion to bring debate to a close on an amendment that would repeal a tax-related reporting requirement included in the 2010 health care overhaul/On the cloture motion
senate Roll Call 231     Sep 14, 2010
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This vote was on whether to bring debate to a close on an amendment by Mike Johanns, R-Neb., that would have repealed a tax reporting requirement in the 2010 health care overhaul law.  The repeal would have been paid for by reducing the number of people that would be required to purchase health insurance as part of the health care law.  The amendment was offered to a bill that would create several tax incentives for small businesses, as well as authorizing a small business lending fund.

Republicans had threatened to hold up the bill’s consideration indefinitely with a filibuster, causing Senate Majority Harry Reid, D-Nev., to file what is known as a “cloture motion,” which is a vote on bringing debate on a bill or amendment to a close.

If the Senate votes to “invoke cloture” – or bring debate to a close – then lawmakers must either hold a vote on the legislation, amendment or motion in question, or move on to other business. This type of motion is most often called on contentious legislation where the leadership is concerned that consideration could be held up indefinitely by a handful of senators. 

The tax provision that Johanns’ amendment would repeal was put into the health care overhaul law to help raise revenue to pay for the cost of the overhaul; that provision was estimated to raise $17 billion at the time.  The provision requires that businesses file tax forms any time they spend more than $600 per year for goods and services purchased from a business.  Currently businesses only need to file this form if they purchase $600 per year for goods and services from unincorporated service providers.   The idea of the provision was to ensure that requiring businesses to disclose these payments would make it less likely for them to hide income from the IRS.

Johanns said the extra paperwork is burying small businesses in red tape and preventing them from expanding and hiring more Americans.

“There have been a lot of promises from this administration and even from this Congress to support small businesses, but America is coming to the conclusion that the promises are empty. And this 1099 mandate in the health care bill is a perfect example of why they are giving up hope. You see, our small business owners, our medium-sized business owners, and our large business owners are frustrated with nice speeches that are followed by strangling regulation, new taxes, and really absurd paperwork mandates,” Johanns said. 

Max Baucus, D-Mont., said Johanns’ amendment is “killer” – meaning that if it were adopted it would kill the entire bill – and that it goes “in the wrong direction.”  He said Johanns’ amendment would increase health care premiums by about 4 percent for individuals purchasing their own health insurance, according to the Congressional Budget Office.

“It would expand the exemption from the responsibility to buy health insurance. Fewer people would be responsible to buy health insurance. The amendment would raise revenue because it would thus decrease the number of people who receive Federal tax credits. Fewer Americans would get insurance and fewer people would get tax credits to buy the insurance,” Baucus said.  “The Johanns amendment would increase the number of uninsured by 2 million people—increase by 2 million the number of people who are uninsured. Under the Johanns amendment, much of the cost of caring for the uninsured would therefore continue to be shifted to people with insurance, as it is today, and the premiums would continue to go up for all the rest of us to pay for that.”

Some Democrats do agree, however, that the paperwork mandate may be excessive and deserves another look, but that the approach taken by the Johanns’ amendment isn’t appropriate.  They instead put forward an amendment by Bill Nelson, D-Fla., that would exempt very small businesses (those with less than 25 employees) from complying with the provision, and provide some other exemptions (see vote 232).

By a vote of 46-52, the motion to bring debate to a close was rejected.  Every Republican present voted to bring debate to a close.  Of Democrats present, seven voted to bring debate to a close and 50 voted against, including a majority of the most progressive members.  The end result is that cloture failed, and debate on an amendment to eliminate a tax paperwork requirement for businesses and reduce the number of people required to have health insurance continued.

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