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More red tape

Posted: October 5, 2010 3:33 p.m.
Updated: October 6, 2010 5:00 a.m.

The full effects of the Obama health care plan are yet to be seen; indeed, most lawmakers in Washington couldn’t possibly have read the entire bill in its voluminous form when they voted to pass it, so we’ll be discovering things as we go forward -- and as one publication pointed out recently, some of those things will be completely counterproductive to good government and will, during the administration of possibly the most anti-business president in history, throw huge and expensive amounts of paperwork on small businesses.

The other publication pointed out that the provision referred to, which will take effect next year, will require all businesses to issue an Internal Revenue Service Form 1099 for every person, corporation or other entity to which they pay more than $600 during a year. The idea behind it is to recover taxes on unreported income, and there’s nothing wrong with the idea -- if it would work. But it will cost businesses billions of dollars, and even the IRS says it’s unprepared to handle the millions of new forms which will be created. Nina Olson, IRS national taxpayers advocate, has said the additional administrative costs to small business “may turn out to be disproportionate as compared with any resulting improvement in tax compliance.” That’s bureaucratic language for “this is a mess.”

This is but one provision of a poorly conceived idea that will bog businesses down in bureaucratic red tape. It’s just one more example of the Obama administration’s “love employees and dislike employers” mindset. As the country tries to work its way out of a recession, small businesses will have to help lead the way. This provision will be a millstone around their necks.


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