Democrats to small business…we love you…we love you not…
On Tuesday, the Senate voted to advance a bill, pushed by President Obama, that ostensibly is designed to help small business. One key provision of the bill creates “Son of TARP”, a $30 billion fund to encourage small community banks to make loans to small business. Other provisions give small business $12 billion in tax breaks, and allow them to write off 50% of the cost of new equipment in the year that the equipment is purchased. That’s the “we love you” part.
Small businesses will need every penny of those loans and tax breaks to pay for the “we love you not” part.
Senators Mike Johanns (R. Ne.) and Blanche Lincoln (D. Ak.) were co-sponsors of an amendment to this bill that would have repealed a new requirement that all businesses must submit an IRS Form 1099 telling the IRS about any purchases of goods or services that they make from anyone where the total amount of their purchases is $600 or more in any calendar year. The theory was that if Uncle Sam knew how much income everyone made, Uncle Sam could insure that everyone paid tax on their income.
Perhaps the best description of the “cost” of this new IRS Form1099 requirement is:
Think about a midsized trucking company. The back office would have to collect hundreds of thousands of receipts from every gas station where its drivers filled up and figure out where it spent more than $600 that year. Then it would also need to match those payments to the stations’ corporate parents.
Gee, that should be easy and inexpensive to do.
But, the amendment was voted down. So, why did the Senate vote the amendment seeking to repeal this lunacy down?
Over the weekend the Treasury Department pronounced the Johanns amendment “not acceptable in its current form.”
And, why isn’t it acceptable?
The new 1099 filing requirement is part of…Obamacare!
And, why is is part of Obamacare?
Well, Obamacare was proclaimed to be deficit neutral. To get to that mythical “neutrality” the Form 1099 requirement was added as someone in Washington decided that $17.1 billion in “uncollected” taxes would be collected if only the IRS had this information. Personally, if more than 24 cents is collected, I’d be surprised.
What did the Treasury Department previously have to say about this new requirement?
…the Treasury Department’s National Taxpayer Advocate Nina Olson says the costs will be “disproportionate as compared with any resulting improvements in tax compliance.”
One more question…if that was the position of the Treasury Department, why the heck didn’t the amendment calling for the repeal of the new 1099 requirements pass?
It would repeal a portion of Obamacare, and Obama wouldn’t stand for that.
17 Comments
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WOW, It gets scarier and scarier! Thanks as always, this is a nightmare and things are way to complicated for me.
Ironic, Sen John Thune (R-SD) proposed an amendment in March of this year to a tax bill before congress which would grant small business tax incentives to encourage new capital investment and hiring.
It would be paid for by redirecting a portion of the unused 1st ($860B) stimulus. The bill would also eliminate capital gains taxes on small business investment and 20% deduction on their income.
I wonder what happened? 6 months later and it's still talk, talk, talk and protecting agenda.
I would take the "we love you" part and call it a day. But, then no tax breaks by the Dems will be welcomed by the Right.
That would be nice, sammy, if you weren't forced to take the "we love you not part" too.
Targeted tax breaks are unequal treatment. Targeted tax cuts go where the pols want them to, be it for good or bad reasons, but hardly for many valid economic reasons. Taxing a company, then handing some or all of the money back, simply means that the government gets to tell you how, where and when to spend the money. It is about control, not economics.
And any "gift" from the "we're here to help you" government is wrapped up with a big fat bow made of shiny red tape. Lots of it. This post is case in point.
Tell you what, Dims: I'll take the 50% write-off. You can keep philosophizing.
Dimsdale: I agree, but you forgot to mention that prior to handing some of the money back, the big, fat government absorbs, wastes, pockets, and vaporizes most of it.
Prejudice against the wealthy (and businesses) is no different than prejudice against race, religion, creed, etc. If it were, then why would people keep, so confidential, the amount of money they make; it's taboo to ask about it.
Oh, and I am not rich.
Sammy, if they are putting it in one pocket, and simultaneously taking it out of the other (or usually more), you aren't "taking" anything. They are: your ability to run your business as you see fit, for better or worse. And even contemplating the "unintended" consequences, like how they will find ways to turn that 1099 filing requirement into yet another tax and/or fee. And how long do you think the write off will last, until the election is over? Until they decide that "they can't pay for it anymore"?
If taking the crumbs they throw you is what you want to do, then more power to you, brother. "Just lie back and think of England", as they told Victorian brides.
Love that optimism on the Right! But the last sentence was superfluous.
I thought it was super______ also Dims, only we won't be lying back. We are being bent over.
Waiting to hear from the women on these remarks, starting w/ SOS. Some people could use some "sensitivity" training
No need for any sensitivity training here. All Dims is saying is that the Obama administration and many (if not most) of the Democrats in Congress are basically telling taxpayers, especially small business owners, to lie there and take it for the good of the country.
This 1099 provision is absolutely ridiculous. If it stays, if the whole Obamacare bill stays, I imagine a whole lot of business owners going John Galt.
I think there should be a new requirement in order to run for or hold an elective office, especially on the national level. The candidate must have real world experience – either working for or running a small business. No more lawyers or academics who have absolutely no clue.
Sammy22, no sensitivity training for Dims or GdavidH is needed by me. I don't believe in PC and am a product of Women's Lib. You know," I am Woman hear me roar!" Both are just telling the truth and could have said it less delicately, too.
Lucinda, Lynn: thanks for setting me straight on PC. BTW, they are not telling the truth, they are expressing their opinion, I think.
Sammy22,
exactly!
And opinions are formed by how we percieve our surroundings. That's why we all have our own to express.
Sammy22, You do make me stretch. My "truth" is definitely not your "truth". I struggle with trying to be accurate when I write all the time. I find it much easier to express myself verbally. Words mean so much to me. What makes me angriest is the titles of all these bills meant to "help" businesses. Have you ever read them? it is right out of 1984. How can Congress help small business when 95%of the members of either party have never been involved in any small business? President Obama and his group of minions have forever perverted the words of Hope and Change. They have definitely accomplished change, but it is not what at least 60% of the country wants. As for Hope, our son wanted to take over running his father's and his grandfather's company, since he was 16. He graduated #1 in School of Business from his college. He is facing formidible challenges to keep it afloat, caused by the "help" of government both state and federal. I always wanted him to have a better more comfortable life than me. My life has so far been wonderful, but I don't see him having that in his future.
Lynn, I read what's in the bill. What I read above is a "usual" list of complaints. Good luck to your son, he is not the only one being challenged by the state of the country.
Sammy22, Know its too late to respond now, I've been working on campaigns. But Sammy22, you've just made my point. I know he's not the only one challenged by the state of the country. If he was, I would say work harder. I'm trying to put a face on the problems of small business owners. SOS, Dims and NH-Jim are explaining what's specifically wrong with the bill. Most members of the Tea Party are like me, they want their children to know the privilege we have had of living in a country where you could succeed. There is no reason to work hard now, you don't get the benefit of a higher income because it is all going to taxes and supporting those who no longer know how to work. We are going on 3rd and 4th generations of welfare, those children have never learned to work.