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Tipped over

"Tipped over" Continued...

Issue: "Gulf toil," June 5, 2010

Regardless, the added regulations will mean less time and money available to promote and grow her business.

Rys with NFIB is skeptical that the IRS will have the computer resources and manpower needed to enforce the new paperwork requirement, and increases in IRS manpower could eat up the estimated revenue boost.

This pending 1099 surprise is a prime example of the potential fallout awaiting the nation after lawmakers rushed through a trillion-dollar healthcare bill and declared victory before analysts had time to peel back all of its layers.

Why did Congress include the 1099 provision? To get the estimated healthcare overhaul cost low enough to appease fence-sitting congressional Democrats, staffers writing the bill concocted such tax schemes to squeeze in every last drop of revenue. Now businesses owners will be the ones with less cash and fewer resources.

Tax paperwork already is the most expensive federal burden placed on small businesses. Rys with NFIB told me that tax compliance costs are 66 percent higher for small businesses, which lack the in-house accounting departments of large corporations.

But while big business may have the manpower to more easily digest the new paperwork, even Fortune 500 companies are bracing for an avalanche of 1099 forms based on their high volume of transactions.

That is why more than 70 business organizations of all sizes have signed a letter in support of a new House measure to undo the 1099 rule.

Rep. Dan Lungren, R-Calif., has introduced "The Small Business Paperwork Mandate Elimination Act." Despite its hefty title, the bill simply strikes the added 1099 requirement.

"For a small business which doesn't have the manpower, this is yet another brick on their back," Lungren said.

Those crying out for a repeal of the entire healthcare law face a daunting mountain climb. But Lungren may have caught onto a tactic that has a better chance for success: targeting the law one convoluted regulation at a time. Within weeks of its introduction, Lungren's bill has 57 co-sponsors.

Staveley has called her local House member, Rep. Ann Kirkpatrick, D-Ariz., to ask her to support the removal. But she has not heard back from Kirkpatrick's office.

Facing such an onerous burden, on top of all the other federal regulations the company has to comply with, Staveley admitted to me that she and her husband, Gaylord, who has been a part of Canyoneers for 56 years, are considering the unthinkable: retirement.
Email: lpitts@worldmag.com

Edward Lee Pitts
Edward Lee Pitts

Lee is WORLD's Washington Bureau chief. As a reporter for the Chattanooga Times Free Press, he was embedded with a National Guard unit in Iraq. He also once worked in the press office of Sen. Lamar Alexander.

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