Lungren introduces bill to repeal hidden Obamacare tax authority

Rep. Dan Lungren (R-CA) is introducing legislation to repeal vast new authority for the IRS hidden deep in President Obama’s health care law.

Lungren said the Obamacare requirement in question would put an “unprecedented burden” on small businesses in his district, according to his prepared remarks. Calling his bill the Small Business Paperwork Mandate Elimination Act, Lungren is proposing to rescind the requirement.

At issue is section 9006 in the health care law. As reported by The Daily Caller, that provision will require many businesses for the first time to report to the IRS every expense they incur over $600. The section’s purpose is to squeeze more and more tax dollars from businesses to eliminate the so-called “tax gap” – bureaucratese for every red cent Americans owe the IRS but don’t pay up come April 15.

Lungren noted that experts estimated the provision would increase tax revenues by $17 billion annually.

Right now, businesses must report the wages they pay employees. But they are exempt from reporting payments to other businesses and for merchandise.

Even small businesses can easily incur thousands of business expenses over $600 each year. Critics say the requirement will inundate businesses with new red tape and cost them huge sums preparing paperwork.

“This is an enormous and costly new paperwork burden that likely hit about every business, regardless of how small,” Sen. Kit Bond (R-MO) said in a December floor statement about the section.

A Democratic aide who spoke on the condition of anonymity said Sen. Max Baucus (D-MT), chairman of the pivotal finance committee, was a key backer of including the section in the health care law.

The aide defended the provision as a “voluntary” way of increasing tax revenues without raising tax rates, adding that then President George W. Bush’s administration supported the requirement.

“Voluntary information reporting improves tax compliance without raising taxes on small businesses, which is why Presidents . . . Bush and Obama both proposed similar policies to this one,” the aide said.

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  • inspectorudy

    I just read this morning that for most large businesses it will be far cheaper to dump their retiree medical coverage and pay the fines than to keep paying it. The Demorats knew this before hand and knew where this would take the country. That’s right, public health for all!

  • erick1740

    This administration is the most corrupt ever, everything they do is a half truth or an outright lie. A hidden tax in a so called health bill. The reform bill is just a payout to the CCX and Algore. This has to be stopped.

  • Lily

    This is the mechanism needed to implement a VAT. It doesn’t really have to do with health care.

  • timeisnow

    This entire bill should never have been passed, hopefully bit by bit they take all the nasty stuff out…

  • Jorge Emilio Emrys Landivar

    This is absurd.

  • praxis7

    The cost of compliance for the new IRS requirements contained in the so-called health care bill are astronomical are effectively an indirect tax that will be paid by consumers in the form of higher prices.

    And on the other side, the massive amount of data that would be sent to the government under this law will require the IRS to grow immensely in order to collect and reduce that data – and finally to act upon what they find.

    Net-net: Bigger government, higher costs, increasingly screwed tax payers and businesses.