A tiny health care victory

Congress has passed, on and Obama is expected to sign, the first mini-step in the repeal of nationalized heath care.  The widely despised 1099 requirement will be removed:

Congress sent the White House its first rollback of last year's health care law Tuesday, a bipartisan repeal of a burdensome tax reporting requirement that's widely unpopular with businesses. Even President Barack Obama is eager to see it gone

The Senate voted 87 to 12 to repeal the filing requirement, which would have forced millions of businesses to file tax forms for every vendor selling them more than $600 in goods each year, starting in 2012. The filing requirement is unrelated to health care. However, it would have been used to pay for part of the new health law.

Why is the 1099 requirement so unpopular?

Businesses already must file Form 1099s with the IRS when they purchase more than $600 in services from a vendor in a year. The new provision would have extended the requirement to the purchase of goods, starting in 2012.

The requirement would hit about 38 million businesses, charities and tax-exempt organizations, many of them small businesses already swamped by government paperwork, according to a report by the National Taxpayer Advocate, an independent watchdog within the IRS.

The 1099 requirement appeared bizarre from the start.  Your lawn service would need to keep purchase records for every gas fillup, every spark plug, every printer cartridge, and every box of envelopes they purchased, then send a 1099 form to each of those vendors,  and be able to produce those records for the IRS on demand.  

We're trusting souls here at South of 5 and 20, but a more cynical observer might think the 1099 rule was included in the 2000 page health care bill just so it could be removed later, allowing Obama to use that as proof of how reasonable he was, come 2012.