Free Markets, Free People

Who loves ya, small business?

Well despite all their talk, it isn’t the Democrats. Speaking of the "party of no"Yesterday they killed an amendment offered by Sen. Mike Johanns (R-Neb.) that would have dropped the requirement for increased 1099s issued by business thereby saying "no" to saving huge compliance costs for small businesses.

Johanns said Section 9006 of the ObamaCare bill, requires a "2,000 percent increase" in mandatory filings of 1099 tax forms for businesses, charities, state and local governments, and even churches.

That means that in 2012:

…all organizations will be mandated to issue 1099 tax forms not only to contracted workers, but to any other group or business from which they purchase at least $600 worth of goods or services in a given year. They’ll also be required to send a copy of each 1099 document to the IRS. Johanns called the entire process "punishing" to businesses and cited a July report from the IRS’ independent taxpayer watchdog arm warning that Section 9006 "may impose significant burdens" that it labeled "disproportionate" and perhaps unenforceable.

Also killed was a proposal by Sen. Bill Nelson (D-Fla.), which would have raised the minimum annual threshold for 1099 requirements from $600 to $5000, and would have exempted businesses with 24 or fewer employees. 

Now, just sit back and imagine the compliance cost this will require.  If you ever wanted an example of why businesses have no confidence in government, this should help you with that understanding.  This is as much an unfunded mandate as any.  And it will have businesses wondering if they want to spend the money if they have to report just about everything they do via 1099. 

As usual, a duplicitous White House is involved as Guy Benson reports:

Johanns was especially critical of the White House’s role in torpedoing his amendment. Yesterday afternoon, he told that the president’s stated support for repealing Section 9006 was a bluff. "The White House is panicking. They know it’s a disaster, and they wanted to send a signal that they’d cede ground knowing full well my amendment and [Nelson’s] wouldn’t pass," he said.

So as you sit in your office at 9pm filling out 1099s or paying someone else overtime to do it, remember who brought you the onerous and costly task.  Then do what you must.



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30 Responses to Who loves ya, small business?

  • One of the lessons that I learned in business …

    You can always tell when an organization has lost their way .. They take out time to change their logo

    Can you believe this is the DNC’s bombshell “major announcement”

  • It is not just  the actual preparation and mailing of 1099 forms  that is onerous. In order to be able to determine who needs to get a 1099 an organization must keep track of *where* every penny of spending goes in addition to which account gets charged.  No more petty cash funds, and every PO, no matter how small, needs a tax number.
    At my place of employment we need some new software. My boss must now get more information from the vendor before he can even make out a PO and the accounting dept. must establish an account for that vendor even if we never buy anything else from them. My boss does not appreciate the increased work load.

  • Private Business: SIMPLIFY
    Government: COMPLEXIFY

  • I’d say something snarky about how extra paperwork is exactly what the IRS needs, but it’s not a joke– this is another way to expand government employment rolls along with government power.  Oh gee, it seems as if our new law is overwhelming the IRS.  I know!  We’ll just double the staff!

    • ding! ding! ding!.

      European style makework from the 60’s and 70’s.   They are serious counting on this to make jobs. 

      You see, businesses have infinite profit and will just dig into profits for those hires.  This won’t impact any other aspect of their business operations. 

  • all organizations will be mandated to issue 1099 tax forms not only to contracted workers, but to any other group or business from which they purchase at least $600 worth of goods or services in a given year.

    I will not comply.  I will not submit.  I will resist ObamaCare at every opportunity.

  • If one was looking down the road to implement a VAT tax then wouldn’t it be wonderful to have something like this already in place?

  • As I read the voting, Bill Nelson voted against cloture for his own amendment.  I don’t want to hear anything out of him as to how he tried to help small business, but was defeated in the Senate.  Hell, he essentially voted against his own amendment  Nelson is a weasel.

  • I’m glad this didn’t pass. Watering down the health care bill now would:
    A) Give the Democrats opponents (a little) less to go on in November
    and B) reduce the chances of the whole thing getting repealed even if the Republicans win both the House and Senate

  • Again, this is TOTALLY consistent with the Obamic fascist economic model.
    Fascist economics is inimical to small business.  It favors BIG business, largely because it is MUCH more tractable.
    It is an economic truth that any form of regulation works as a bar to small business creation, and a fatal hurdle to small business survival.

    • I was going to say pretty much that.  I have liberal friends who think that big business is the devil and believe republicans are all buddy buddy with big business and dems are looking out for the little guy.  This type of legislation insures that nobody enters or survives in the market that isn’t already a big business.

      • ObamaCare HAS to be the most disobeyed law since Prohibition.  We owe it to ourselves, our descendants, and our nation.
        There aren’t…and never could be…enough people in the Federal government to force compliance.

  • Louis 16th once famously called up one of the nouveau riche merchants to Versailles and asked him what could the crown do to help him and other businessmen.

    The merchant replied, “Laissez Faire, Leave us alone.”

    Do these clowns think that this will endear them in any way to the small and medium business community?

    • No they just think about where they can get more money to buy more votes.  Business is nothing more than a resource to be plundered in order to maintain their power.

  • I am getting a spyware waring from Google Crome when I come to this site now.
    Bad ad or dirty tricks?

    • Dirty tricks? I don’t know, but I think it references “rcpblogrolling” which has to do with “RealClearPolitics”, not QandO. I’m not sure why we’re involved though. Be advised thought that only Google Chrome does it. IE and Firefox are fine.

  • My intuition was that this would suck for small business, but I talked to the pops about it – he being a staunch conservative and small businessperson – and he said it just wouldn’t be a big deal for most small business.  Most people have Quickbooks, so it just means punching a few keys.  He said it would suck for big business and wouldn’t be cost-effective (since the IRS will have to hire more people to wade through the ensuing sea of documentation)
    Thought that was interesting.

    • Well, the small business will have to go to the trouble of getting everyone’s EIN.  And, as mentioned before, all payments will have to be tracked by EIN – even petty cash – to monitor against the $600 threshold.  If you do a lot of business with franchises, you’ll won’t necessarily be able to lump everything under Starbucks or McDonalds since you might do business with several separate entities of the same corporate name.

    • As one who has had to ‘just punch a few keys’ in small businesses I disagree.