You can't go anywhere in Nebraska and not be impressed by our small businesses. They're in every community, run by hardworking Nebraskans who not only provide all the products and services needed for everyone in our towns and cities, they are the driving engines of Nebraska's economy.
Nebraska has 41,288 small employers, according to the Small Business Administration's Office of Advocacy. Over the last 15 years small businesses have created two-thirds of all new jobs in our country.
In my travels across Nebraska listening to Nebraskans everyone talks about the need to make sure our small businesses can thrive. The new health care law has small business tax credits that are helping improve their business environment. The state's largest health insurer recently said the tax credit is causing a spike in small businesses signing up to provide insurance, which is good news for their employees and our state.
But I've also heard a lot lately from people about a new rule in the health care law many Nebraskans say will do just the opposite. It requires small employers to fill out many more IRS form 1099 reports for cumulative transactions of $600 or more.
So many added reports are required they'd have to take existing employees and dedicate them to keeping up with all the paperwork. Or they'd have to hire accountants and lawyers, or both. They won't be able to hire new employees to serve their communities better.
Since last fall, we've been working to roll back this new requirement and even though there's bipartisan support and many in Congress, we haven't gotten it done yet. I hope some of the stories I've heard will help.
For instance, one Nebraskan who runs a private foundation wrote that that new 1099 rules will mean they'll have to report the same thing twice. They already fill out IRS forms every year reporting their income and spending.
The double reporting will decrease dollars they and any other foundation can pay to non-profit organizations that already are on very tight budgets. That will cut dollars to serve those in need because precious resources will be diverted, just to fill out 1099 forms.
"If you consider multiplying those diverted amounts across the nation, that could spell disaster on a very broad scale increasing social hardships enormously," wrote this person, who made an even more troubling point. If non-profits and small businesses cannot prosper, the government will have fewer organizations and businesses to tax. Tax revenues will fall, the economy will get worse and more people in need will grow. It's a vicious cycle.
Nebraska franchise owners also told me that tracking and sending out all the 1099s will eat up time and add costs to dozens of Nebraska small businesses. One wrote that it adds one more "hurdle for businesses like ours to have to jump in order to survive."
Fortunately, we're getting close to fixing this problem. I recently wrote a letter with several colleagues to House Speaker Boehner asking him to bring up and get the House to pass a bill rolling back this burden because tax bills have to start in the House. I'm also cosponsoring several Senate bills to roll it back, and strong bipartisan support should make this happen.
As we said in our letter, the American people want us to focus on job creation. Rolling back this wrong-headed paperwork nightmare will be a good way to show we can work together for our small businesses so they can grow the economy.