C110 SA 166

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Senator Gordon Smith of Oregon on January 23, 2007 submitted this amendment to be proposed by him to the bill H.R. 2, to amend the Fair Labor Standards Act of 1938 to provide for an increase in the Federal minimum wage; which was ordered to lie on the table; as follows:

At the appropriate place, insert the following:

SEC. __. EXPANSION OF DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-EMPLOYED INDIVIDUALS.
(a) In General.--Paragraph (1) of section 162(l) of the Internal Revenue Code of 1986 (relating to special rules for health insurance costs of self-employed individuals) is amended to read as follows:
"(1) ALLOWANCE OF DEDUCTION.--In the case of a taxpayer who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to the amount paid during the taxable year for insurance which constitutes medical care for--
"(A) the taxpayer,
"(B) the taxpayer's spouse,
"(C) the taxpayer's dependents,
"(D) any individual--
"(i) who was not the spouse, determined without regard to section 7703, of the taxpayer at any time during the taxable year of the taxpayer,
"(ii) who--
"(I) has not attained the age of 19 as of the close of the calendar year in which the taxable year of the taxpayer begins, or
"(II) is a student who has not attained the age of 24 as of the close of such calendar year,
"(iii) who, for the taxable year of the taxpayer, has the same principal place of abode as the taxpayer and is a member of the taxpayer's household, and
"(iv) with respect to whom the taxpayer provides over one-half of the individual's support for the calendar year in which the taxpayer's taxable year begins, and
"(E) an individual--
"(i) who is designated by the taxpayer for purposes of this paragraph,
"(ii) who is not the spouse or qualifying child of such taxpayer or any other taxpayer for any taxable year beginning in the calendar year in which the taxpayer's taxable year begins, and
"(iii) who, for the taxable year of the taxpayer, has the same principal place of abode as the taxpayer and is a member of the taxpayer's household.
For purposes of subparagraph (E)(i), not more than 1 person may be designated by the taxpayer for any taxable year.".
(b) Conforming Amendment.--Subparagraph (B) of section 162(l)(2) of the Internal Revenue Code of 1986 is amended by striking "or of the spouse of the taxpayer" and inserting ", of the spouse of the taxpayer, or of any individual described in paragraph (1)(E)".
(c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2007.

Contents

Analysis

This amendment was offered in a flurry of amendments by the GOP side to slow down passage of the minimum wage bill. This bill could be seen as a way to "filibuster" by amendment. While the change itself is on language that would help small business owners to deduct healthcare coverage, an area of debate which can be spin as helping expand healthcare coverage as an offset to increased minimum wage expenses, thus making it more problematic to attack Smith on the merits of the amendment itself.

This amendment is identical to one Smith submitted earlier in the day, SA 132 with Chuck Schumer.


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