House Democrat pushes for 1099 repeal

The remarks are in line with comments made Tuesday by Senate Majority Leader Harry Reid (D-Nev.) that he prefers the pay-for included in the House version of a 1099 repeal, which some House Democrats oppose. 

“The 1099 is something we’re going to look at,” Reid said. “Me, personally, I like the House pay-for better than ours, so we’ll have to see.”

The debate isn’t whether to repeal the provision included in the healthcare law, which requires businesses to file 1099 forms to the IRS for any vendor purchases of $600 or more, but how to pay for it. 

On March 3, the House passed a 1099 repeal measure that requires taxpayers who receive federal health insurance subsidies to reimburse the IRS with substantial penalties if they earn more than expected, especially after qualifying for the subsidy. 

House Democrats have called the offset a $25 billion tax increase on the middle class and said it would ensnare taxpayers who straddle the 400 percent income line arguing that a year-end bonus could push taxpayers “over the cliff” requiring thousands to repay the subsidy.

Last week, House Ways and Means ranking member Sander Levin (D-Mich.) said the move could leave nearly 300,000 uninsured because those who are on the line would fear having to pay back the tax break. 

Meanwhile, House Republicans have argued that those taxpayers who exceed the income levels shouldn’t have received the subsidy and should pay it back. 

They also have argued they it’s the same pay-for offered by Democrats last year to cover the “doc fix.” 

Sen. Mike Johanns (R-Neb.), one of the leaders of the 1099 repeal effort in the Senate, has introduced a measure that mirrors the House-passed legislation.

Jason Millman contributed to this story.