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McNerney’s tax amendment nixed in House

By Josh Richman
Thursday, March 3rd, 2011 at 3:10 pm in healthcare reform, Jerry McNerney, taxes, U.S. House.

As the House voted 314-112 today to repeal a part of last year’s health care reform requiring businesses to report far more of their business transactions to the Internal Revenue Service, an East Bay lawmaker tried to attach an amendment providing a middle-class tax cut paid for by closing tax loopholes exploited by oil and gas companies.

“As a former small business owner, I know firsthand what it’s like to make ends meet when times are tough,” Rep. Jerry McNerney, D-Pleasanton, said in a news release. “It’s more important than ever now that we provide small businesses with the tools to succeed. I support repealing the 1099 provision, but we can improve the Republican proposal and help middle class families.”

“That’s why I offered an alternative,” he continued. “My amendment repeals the 1099 requirement and also provides a middle class tax cut paid for by closing tax loopholes exploited by big oil and gas companies. Oil companies have earned record profits over the last few years, and it’s just not right for them to take advantage of special loopholes when the middle class is struggling.”

Consideration of McNerney’s amendment was blocked by a vote of 243 to 181; all Bay Area House members – except Jackie Speier, who didn’t vote – voted in favor of considering his amendment.

Last year’s Patient Protection and Affordable Care Act included a provision requiring corporations that aren’t tax-exempt to report to the IRS all payments of $600 or more. This was meant to raise about $21.9 billion more in tax revenue over the next decade, to help pay other parts of the health-care reform bill.

H.R. 4, the Small Business Paperwork Mandate Elimination Act to would repeal the 1099 reporting requirement, was offered by House Republicans. Although Democrats and President Barack Obama agree the provision should be repealed, some opposed this bill because it makes up for the lost money by accelerating repayment of health insurance subsidies for families above certain income thresholds – something they say would hurt working, middle-class families. McNerney was the only Bay Area member to vote for the bill today; all others opposed it except Speier, who didn’t vote.

The U.S. Senate passed its own Democratic-backed version of the repeal last month, and now the two chambers must reconcile their language on the issue before it can move forward.

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  • Elwood

    McNerdney strikes (out) again!

  • John W

    This item seems like an incomplete story. What was the nature of the “middle class tax cut?” What was this really about? A serious proposal, or just a way to get Repubs on record voting for big oil and against “the middle class?” This seems to be outside the policy areas McNerney generally deals with.

  • Josh Richman

    John: I’m awaiting a copy of the amendment’s text, and will update this or post a new item when I’ve got it.

  • John W

    Thanks Josh.

  • Josh Richman

    Click here for the text of McNerney’s amdendment.

    As I’d reported, some Democrats balked at this bill because it makes up for the money lost from canceling the 1099 reporting requirement by accelerating repayment of health insurance subsidies for families above certain income thresholds – something they say would hurt working, middle-class families. McNerney’s amendment would’ve given a tax credit to families adversely affected by this, and then paid for it by closing two tax loopholes used by oil and gas companies.

    McNerney spokeswoman Sarah Hersh said current law lets large oil companies claim a tax deduction for a variety of production activities; McNerney’s amendment would’ve eliminated this deduction for the biggest companies, leaving small producers unaffected. And McNerney also proposed making oil and gas companies ineligible to use the “last-in, first-out” accounting method, in which the most recently produced product is recorded as sold first; U.S. companies for decades have used this method because it reduces their income taxes in times of inflation.

  • John W

    Josh: Thanks for the links to both H.R. 4 and McNerney’s amendment. The 1099 reporting requirements were not a good way to help pay for health care. Nor was eliminating oil drilling subsidies a good way to pay for repealing the 1099 requirements. But eliminating the oil drilling tax breaks is a good idea independent of the health care legislation.

  • Elwood

    “But eliminating the oil drilling tax breaks is a good idea independent of the health care legislation.”

    Of course it is. Anything to discourage domestic production and increase dependence on foreign oil.

    Typical mush headed liberal thinking.

  • John W

    “Anything to discourage domestic production and increase dependence on foreign oil. Typical mush headed liberal thinking.”

    Who wants to discourage it? Just don’t want to unnecessarily subsidize it! If that makes me a Commie Pinko, so be it. Some of these tax breaks date back to the early part of the last century, when oil was a fledgling enterprise. At today’s prices for crude, it seems to me big oil has plenty of incentive to “drill baby, drill.”