Elk Grove Citizen: Lungren Calls for Repeal of Part of Healthcare Reform

Press Release

When President Barack Obama signed the nation's major healthcare reform bill in March, it contained a little-known segment requiring businesses to file tax forms each time they pay more than $600 for goods or services.

Rep. Dan Lungren (R-Gold River) opposed the bill in Congress, but didn't notice that specific requirement until after it had been passed. Now he's making a push to have the section removed from the legislation, and last week held a press conference in Elk Grove to make his case.

Lungren gathered with representatives of a half-dozen local chamber of commerce representatives, business owners and representatives from the National Federation of Independent Business (NFIB) at Elk Grove's McConnell Estates Winery on June 3 to support H.R. 5141, his bill to repeal the new tax requirement.

He said the provision -- which requires businesses to file a separate IRS Form 1099 for each company to which they pay $600 or more -- would unfairly hurt small businesses.

"It has nothing to do with healthcare," Lungren said. "It is a reporting requirement that is burdensome on business."

Mike Wackman, the owner of the winery where the press conference was held, said the new requirement would mean he would have to file 300 extra forms each year.

"These are forms that take hours to fill out," he said of the forms he already is required to file with the IRS, EPA and others. "A lot of that is paperwork shuffling, and paperwork shuffling does nothing for this country. It does nothing for our businesses."

Lungren said the extra time spent filing the tax forms wouldn't be the only downside.

"This will prove detrimental to small businesses in that if you are going to have to file (additional Form) 1099s, one way to minimize the number of 1099s you file is to only buy things from a few companies," Lungren said. "And so you'll go to a big-box store instead of a local hardware store."

Congress reportedly estimates the new tax requirement will earn $17 billion in new revenue over 10 years, but Lungren disputed that figure.

"The only way they could (assume) that is they're assuming everybody's cheating," Lungren said. "That's the only way you're going to get $17 billion."

He said in order to make their case, supporters of his bill would be "burdened with finding $17 billion in other taxes or spending cuts."

He said he wouldn't support new taxes, and expected an uphill battle to cut any spending.

Lungren said he didn't notice the provision until after the healthcare reform became law because "it was one of many things in (the) 2,700 pages" of the bill.

"No one would accept it when it saw the light of day," Lungren said, adding that legislators commonly try to hide "pet projects" in large spending bills.

But some question Lungren's motives.

Ami Bera, a Democrat and an Elk Grove resident running against Lungren in the upcoming November election, said it is just posturing.

"After decades of putting the interests of corporate America and Wall Street above the interests of working Californians, Dan Lungren's new-found interest in small business owners is nothing more than a hypocritical, election year ploy," Bera said in an e-mail.

In the e-mail, Bera encouraged Lungren to hold a joint town hall meeting with him to discuss the matter.

At the June 3 press conference, Lungren said he's not the only one making this push, and mentioned a Web site -- www.StopForm1099.org -- that he "had nothing to do with."

Rita Velasquez, interim executive director for the Elk Grove Chamber of Commerce, said after the press conference that the healthcare reform's tax requirement would be "detrimental to our small businesses."

In a May 27 letter to Lungren, Steve Griffin, president of the chamber's board of directors, voiced his opposition to the new requirement.

"When the United States is depending on the small business community to generate jobs and grow the economy, lawmakers are diverting their precious time and resources to collecting volumes of information and filling out mounds of new paperwork for the government," Griffin wrote.

Source