Ed Morrissey posts, Obama pumps small-business plan while ObamaCare threatens their survival
What might be needed is less government — especially ObamaCare. David Frum wrote yesterday about a little-discussed codicil within the health-care overhaul that threatens to drown small businesses in red tape, IRS audits, and overhead:
They have reason to be afraid. Right now, business owners file two forms when they employ people: a W-2 for employees and a 1099 for freelance contractors. A typical small business files 10 such forms, at a cost of 3-5 hours of time per year.
Embedded in the new healthcare law, however, is a staggering requirement: using a new form — the 1099k — small businesses will have to start reporting all their purchases of goods from other businesses. (You can see a draft version of the 1099K form on the IRS website.)
Did you rent a car or stay in a hotel? 1099K.
Buy ink and paper from Staples? 1099K.
Lease space in a local mall? 1099K.
Collect revenue from PayPal, eBay or Amazon merchants? 1099K.
And don’t forget to collect each company’s taxpayer ID number while you are at it!
I wrote about this in April, as yet another item on Nancy Pelosi’s list of nuggets we couldn’t find in ObamaCare until it passed. This puts small businesses at a huge competitive disadvantage. The overheads costs on this kind of activity are only moderately scalable, which means that large businesses with robust G&A staffs can handle it better than a mom-and-pop business that runs on thin margins already. They have the ability and manpower already to deal with more paperwork, and the addition of more people will put a smaller pressure on their prices than at small businesses.
If the small businesses don’t get the 1099s, they can’t take their businesses expenses as a deduction against earnings any longer, where receipts sufficed before.
This is a nightmare of bureaucratic paperwork.
The bottom line is, Obamacare is only a means through which the populace, business and society at large will be brought into further control by the government.
That’s why they had to pass it to find out what’s in it.