Friday, September 24, 2010

Obamacare's Collateral Damage.

Tucked in the deep recesses of the Obamacare Law is this mind-blowing tax-reporting provision (as reported by the Paper of Record):

...To improve compliance, the new health care law requires businesses to file tax forms known as 1099s identifying anyone to whom they pay $600 or more for goods or merchandise in a year.

Businesses will also have to send copies of the form to their vendors, suppliers and contractors. The forms are already widely used to report various kinds of payments of taxable income other than wages, like interest income or dividends. But the health care law requires filing the forms in many more instances than they were typically used before.

The premise of the requirement was that businesses would be more likely to pay taxes on their income if they knew that the income was already being reported to the Internal Revenue Service by their business partners...

The claim is that whopping $17B in additional revenue may be recovered over the next ten years. Of course, the cost to businesses - particularly small businesses - is not considered. Former GE CEO Jack Welch made the following observation: a independent truck driver who hauls cross-country loads will have to issue 1099s to dozens of truck stops, simply for fueling-up his rig, or face the wrath of the IRS.

This madness must end.

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