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The health care law's job-killing tax mandate

Monday, September 13, 2010

Our nation's farmers, ranchers, and small businesses could have a pile of paperwork in their near future, thanks to -- of all things -- the government takeover of health care.

The new health care law signed by President Obama requires farmers, ranchers, and small businesses to file a Form 1099 with the Internal Revenue Service for every vendor or contractor from which they purchase $600 or more in goods or services in a calendar year.

In other words, when a farmer or rancher spends $600 on feed corn, seeds, fertilizer, fuel, equipment, or nearly every other expense, they will have to research and prepare a 1099 form for each and every vendor. When a shop owner pays the rent, a 1099 form will need to be sent to the landlord and then onto the IRS. A plumber who pays for lunch once a week for his employees will need to send a 1099 form to the restaurant, while at the same time receiving a 1099 form from nearly every business client.

This provision was added to the health care bill without any debate or chance for the public to weigh-in on its costs to our nation's small businesses, farmers, and ranchers.

In addition to the hours and hours simply spent tracking down all of this information, business owners may have to purchase new software or pay for additional accounting services. Even then, this new requirement could lead to thousands of innocent mistakes resulting in penalties on the very industries which we need to help for our economy to recover.

The National Federation of Independent Businesses (NFIB) has stated this provision will have a "direct negative impact on small businesses" which lack in-house accountants and which already pay 66 percent more on tax compliance than large corporations.

The NFIB also pointed out the "1099 reporting will cost more in compliance than it will generate in revenue."

The 1099-nightmare not only will create an administrative burden for our nation's family farms, but also will unnecessarily increase the risk of identity theft due to the increased exchange of personal identification.

Each of the 1099 forms will contain personal information about the vendor -- including social security information, payment processing information, Taxpayer Information Number, or other information which could easily be used to steal a business owner's identity. Those who know how easily a person's identity can be stolen because of a lost credit card should shudder at the thought of the billions of these forms being sent back and forth across the country.

It's important we repeal this harmful provision before it begins creating economic havoc. This is why I am a cosponsor of the Small Business Paperwork Mandate Elimination Act (H.R. 5141). This bill would repeal the new 1099 requirement and provide relief for producers already burdened by the heavy hand of government. It's a very similar bill to one being championed in the Senate by Sen. Mike Johanns and is just one step we can take to get our economy moving again.

Congress has the responsibility to find ways to get Americans back to work, stabilize our economy, and put our fiscal house in order. With nearly 10 percent unemployment, our nation's agriculture producers and small businesses already have enough headaches. Instead of forcing job creators to track down tax forms and put their personal information at risk, we need to be enacting policies which help them create jobs.


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This provision was added to the health care bill without any debate or chance for the public to weigh-in on its costs to our nation's small businesses, farmers, and ranchers.

Perhaps if the Republican legislators in congress had been truly working towards a health care measure that benefited all Americans and this nation rather than standing in opposition to whatever was proposed by their political/ideological opponents this provision would have been debated. As someone who has operated a couple small businesses I'd think that in this age of computerized record-keeping and accounting compliance will not be as onerous as Rep. Smith would have us believe. I guess when you can't oppose something on the merits and a factual basis try instead to scare your audience with lurid tales of dire consequences.

-- Posted by davis_x_machina on Mon, Sep 13, 2010, at 8:18 AM

The Republicans in Congress obstructed this law because it is a government black hole of regulation, red-tape and economy killing mandates.

The paperwork mandates are job killers. I am a small home flipper, landlord and remodeling contractor. Reporting all transactions to any institution or individual over $600 will be easy? Easy?

How many gas station companies will you have spent over $600 at for business purposes? Auto Repair shops? I have at least 50 vendors who sell to me. How about online purchases over $600? Propoerty taxes? Utilities?

Like many small businesses, I will have my wife quit her other tasks for one week at tax time and help assist me in entering data, correcting accounting discrepancies, and readying reports that will only HELP to fill out the reams of tax forms I need to file. Now she will also need to help me contact and find the tax-id numbers for 50 vendors, 3-5 gas stations, credit cards, online suppliers, phone companies, the internet provider, the office supply store, etc, etc.

Will Home Depot be handing out W-9's at the register? How about efaucets.com, will they have their tax id number online, or just box and send with every order? How about those gas stations, tax-id on every pump receipt?

If the government can't follow every cent, they can't force this "great" healthcare plan on us.

Here in Minnesota we owe the nation an apology for electing Sen. Franken, but Sen. Nelson of Nebraska owes us all an apology for claiming to be with us and then selling out to the party hacks.

Freedom isn't free, and the IRS will tell you so.

-- Posted by Midwest Jay on Wed, Sep 15, 2010, at 11:11 AM

@midwest Curious I would actually say that Franken is probably one of the more level headed politicians in Washington.

-- Posted by Damu on Thu, Sep 16, 2010, at 6:18 PM


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U.S. Rep. Adrian Smith
Washington Report