February 6, 2011

Update: Senators Reed and Whitehouse Vote Against 1099 Relief

Carroll Andrew Morse

In response to my Friday 1099 repeal post, commenter "bythebay" notes that Rhode Island Senators Jack Reed and Sheldon Whitehouse did vote for a 1099 repeal amendment that was submitted by Michigan Senator Carl Levin. The Levin Amendment would have offset anticipated revenues from the 1099 provision by eliminating certain tax-breaks for oil companies. (The amendment that did pass offsets the anticipated revenue from the 1099 provision with "with already appropriated but not-yet-spent funds", according to Adam Sorenson of Time Magazine).

The Nelson Amendment supported last year by Senators Reed and Whitehouse, i.e. 1099 relief for businesses with 25 or fewer employees, also contained the provision about repealing oil-company tax breaks, meaning that if you combine the RI Senate delegation's votes on the Nelson Amendment, the Levin Amendment, and the repeal amendment that finally passed (the Stabenow Amendment), the piece that remains constant is an idea that every business sector in America should have the 1099 requirement for purchases of more than $600 imposed on them, if oil companies get a special tax break from the Federal government.

The question that needs to be answered to resolve this non-sequitur is whether Senators Reed and Whitehouse believe the 1099 measure should ever have been passed in the first place. If the answer is no, i.e. if they believe it was mistake from the very beginning, then why are they insisting that a specific agenda item be traded, in order to fix something they would claim not to support on its own merits? Or do Rhode Island's Senators believe that the 1099 requirement is actually a good idea under certain circumstances?

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"i.e. 1099 relief for businesses with 25 or fewer employees, also contained the provision about repealing oil-company tax breaks"

H'mm. So, in other words, Senators Reed and Whitehouse tried to make small businesses pay because they (the senators) were unable to further skewer their favorite boogie man (Big Oil).


"Or do Rhode Island's Senators believe that the 1099 requirement is actually a good idea under certain circumstances?"

For the record, the 1099 requirement was a bad idea under all circumstances

Again, this remarkably dumb and virulently anti-small business vote needs to feature prominently in the campaign literature of both of their opponents.

Posted by: Monique at February 6, 2011 3:47 PM

"then why are they insisting that a specific agenda item be traded, in order to fix something they would claim not to support on its own merits?"

Isn't that one of the things Republicans wanted to boost fiscal sanity? Pay As You Go with regards to taxation?

As for the actual issue at-hand... I think 25 employees is a bit high as the threshold for this level of accounting, 'five' employees seems like a good number to me, there are no 'rental homes' or 'consultancy run from a house'-type businesses with five employees. Larger operations with more than five employees can handle that level of accounting. The Big Problem with this 1099 requirement was that it required folks like me (a guy and his house) to 1099 my plumber at the end of the year just to deduct a few repairs.

Posted by: mangeek at February 6, 2011 11:58 PM
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