“But we have to pass the [healthcare] bill so that you can find out what is in it.” — House Speaker Nancy Pelosi
ObamaCare’s insane $600 reporting requirement symbolizes everything that is wrong with Congress and why the Democrats will self-destruct on November 2.
According to Section 9006 of the 2,409-page Patient Protection and Affordable Care Act (Orwellian Newspeak for ObamaCare), all businesses will be required to send 1099 tax forms to every company or individual from which they purchased more than $600 in services and goods throughout the tax year, beginning Jan. 1, 2012.
But there’s more to this bureaucratic nightmare. Because businesses have to report the total of all transactions that together exceed $600 over the tax year, every business, large or small, will have no choice but to keep track of all transactions, including those under $600. Individuals and business will not be able to avoid the IRS paperwork by engaging in a series of smaller transactions.
But wait, there’s more. It doesn’t cover only business-to-business transactions. It also applies to individuals who buy cars, appliances, and yes, guns and gold coins. Gold bugs thought they could get around the reporting requirement by making separate transactions under $600 each, but that won’t work either, because the reporting requirement applies to total transactions during the year, not to each transaction. (Gold prices are hitting all-time highs, partly due to gold bugs buying as much gold as they can privately before 2012.)
The new 1099 reporting requirement is supposed to raise $17 billion over 10 years, but everyone admits that it’s going to cost the country’s 38 million businesses a lot more than $17 billion in paperwork and compliance. The IRS will have to hire thousands of agents just to enforce this one section of ObamaCare.
The Democrats are worried that this onerous 1099 provision will make everyone, especially small business, hate Democrats on Nov. 2. So Senator Bill Nelson (D-Fla) has proposed to raise the threshold to $5,000 per year and make up the difference in revenues by reducing oil and gas subsidies. Last week the Senate voted no on the Nelson bill. Nothing short of outright repeal will do, but typical of the current Congress, representatives are dragging their heels. The Obama team fears that once one provision of ObamaCare is repealed, the flood gates will open and Congress will soon repeal other key provisions.
The Democrats’ 1099 Obama-Nation is so egregious that it reminds me of the Prop. 13 revolt in California in 1978. State officials were so oblivious to the rapid rise in real estate taxes in the Golden State that the people voted for drastic reform, in this case, cutting property taxes to 1%.
I see the same kind of backlash coming on November 2. The mid-term elections can’t come soon enough.
Mark Skousen, Ph. D., is editor of Forecasts & Strategies, an award-winning financial newsletter, author of 25 books, and producer of FreedomFest, the world’s largest gathering of free minds (FreedomFest is an open forum–to speak, exhibit, or attend, go to www.freedomfest.com). His personal website is www.mskousen.com. Email address: editor@markskousen.com.