As one of the comments points out, this is very specifically related to miles given as "interest" or "account-opening bonus" on a bank account. For years any non-cash payment in those circumstances has been required to be valued as cash and reported on a 1099, to avoid savings accounts or CDs that dodge taxation of dividends by paying them in various alternative forms, e.g. a savings account that pays interest in Amazon gift cards instead of cash, or a $200 account-opening bonus that's given as a free iPod instead of in cash.<p>Miles received for buying plane tickets, or as reward miles on credit-card spending, aren't considered taxable or reported. It's both cases, the <i>form</i> (miles or cash) doesn't matter, but what they're given for does: rebates aren't considered taxable, whether given in loyalty points or in 1% cash-back or some other form, but interest on a bank account is.
It's more income. So ... more taxes. Think of it like the grocery bag tax in the affluent suburbs. We do need more "investment" in schools ... so this is a win for society, right?