This Gov't neve misses a chance to screw the little guy

Jccarlton · Post by **Jccarlton** » Fri May 07, 2010 11:33 am

They will never miss a chance to screw the little guy.:

http://taxprof.typepad.com/taxprof_blog ... ealth.html

Well, Ms. Pelosi said that they would have to pass the bill to find out everything that was in it. You can hide a lot of tyranny in 2000 pages. If you have a small business spread this around.
H/T MSimon

MirariNefas · Post by **MirariNefas** » Fri May 07, 2010 1:10 pm

How does this screw the little guy?

jnaujok · Post by **jnaujok** » Fri May 07, 2010 2:54 pm

MirariNefas wrote:How does this screw the little guy?

Seriously? Well, personally, as a contractor, I now would need to get the tax ID number from my local WalMart store, the local Pizza delivery place, and a bunch of others, and send them a 1099 form every year. Which also means that I can't just "petty cash" a pizza any more, it's got to be a recorded and accounted for purchase that goes onto the 1099 form at the end of the year.

Normally, as an individual contractor, my (sent out) 1099 count at the end of the year has been either zero or one over the last 10 years. The only time I had one was when I was paying a second consultant.

Now, I expect that the number will be 10-20 this year. My friend who runs a bigger consulting company has already been told by his accountant that he's at over fifty 1099 forms through the first three months of the year. Last year he sent out 3. Realize that if I buy a new upgrade to Visual Studio 2010, ($1299) I have to send a 1099 form to Microsoft, which means calling their office and getting their tax ID number.

Compliance alone for me will go from <5 minutes a year to probably in excess of 8 hours a year. That's 8 hours of work that I can't do, for a total cost to me in excess of $500.

Still think it has no effect? Still think it doesn't screw the little guy when it takes $500 out of my pocket? And <Insert Deity> forbid I miss one and get hit with the $10,000 penalty.

MirariNefas · Post by **MirariNefas** » Fri May 07, 2010 3:58 pm

You buy $600+ worth of pizza every year? As a business expense? What the hell sort of consulting do you do?

It won't cost you $500. You'll just spend another sleepless night working. Or more like another few hours, actually. Getting 10-20 tax ID's and filling out nearly identical forms doesn't sound so bad, especially if the first one took you less than 5 minutes....

It should become streamlined, too. Microsoft will know that every business purchase of Visual Studio means a 1099. They don't want you tying up their phones. So every purchase will start coming with relevant tax information in the receipt.

kunkmiester · Post by **kunkmiester** » Fri May 07, 2010 7:24 pm

Sixty pizzas a year. That's ordering out a little more than once a week.

And the point that this drains money and time is still relevant.

What do you do for a living, MirariNefas? How much per hour do you get paid? "Bill" yourself for the time taken to fill out the forms at that rate. That's how much money your losing, because if you can make time to fill out a few forms, you can use that same time to make some money. That's how jnaujok is looking at it--he's estimating 8 hours for the forms--you can debate that if you like--and in 8 hours, he could make $500 dollars, instead of filling out forms.

Fill out forms or make money. Which do you prefer?

Scupperer · Post by **Scupperer** » Fri May 07, 2010 7:53 pm

I'll make a point to send 1099's to all of the local politicians we give money to, along with every "trade" group I'm a part of (AIA, NCARB, USGBC, etc.), as well as my insurance companies, the Car Tag and Licensing department.

Hell, I'll "lose" the paperwork and send it all to them again.

I relish the thought of swamping the bureaucrats in their own filth.

Otherwise, burn this idea to the ground.

Diogenes · Post by **Diogenes** » Fri May 07, 2010 10:02 pm

MirariNefas wrote:You buy $600+ worth of pizza every year? As a business expense? What the hell sort of consulting do you do?

It won't cost you $500. You'll just spend another sleepless night working. Or more like another few hours, actually. Getting 10-20 tax ID's and filling out nearly identical forms doesn't sound so bad, especially if the first one took you less than 5 minutes....

It should become streamlined, too. Microsoft will know that every business purchase of Visual Studio means a 1099. They don't want you tying up their phones. So every purchase will start coming with relevant tax information in the receipt.

Just bow to the hat William Tell.

MirariNefas · Post by **MirariNefas** » Sat May 08, 2010 2:07 am

because if you can make time to fill out a few forms, you can use that same time to make some money.

No, actually I can't. It's called a salary. I doubt that most small business owners have the capacity to turn hours into cash at will, as well.

MirariNefas · Post by **MirariNefas** » Sat May 08, 2010 2:08 am

Diogenes wrote: Just bow to the hat William Tell.

Time to sell the hat and buy more shoes.

I'm not debating that this is an annoyance. But "This Government Never Misses a Chance to Screw the Little Guy? What the hell? This is a bigger headache for the big guys. This is a drain on the whole country when you look at it in the big picture. But the little guy gets a few more little forms. The topic name is hyperbole. The $600 dollar pizza business expense (and apparantly he only orders from one chain, over and over) is hyperbole. The 8 hours estimation is hyperbole. $500 lost is hyperbole.

Scupperer · Post by **Scupperer** » Sat May 08, 2010 4:04 am

Obviously you've never run your own business and actually had to do the paperwork on your own time and dime.

If I'm wrong in this assessment, I'll eat my shorts. Unless your business failed, in which case, the shorts were already eaten.

MirariNefas · Post by **MirariNefas** » Sat May 08, 2010 4:53 am

You are correct, I have not. Perhaps with more experience I would appreciate just how much pizza a one-man business has to buy. But like most Americans, I am no stranger to bureaucracy. Paperwork is part of the modern way of life - and we all do it on our "own time and dime". Taxes, court forms, DMV forms, leases, loans, etcetera and so on. We all have to live with it.

Tell me, is this going to make small businesses fail? Will it cause people to subsist off shorts?

KitemanSA · Post by **KitemanSA** » Sat May 08, 2010 2:23 pm

This is obviously an attempt to smash the hidden (cash/barter) economy.

As to being size neutral as someone has suggested, this is anything but size neutral. Large companies already do business this way, except their purchases are not in the piddly $600 range, but 10, 100, or even 1000 times that. It won't effect them except at the very margins. But it will place large new burdens on small businesses. And one burden not yet mentioned is the loss of business when small businesses choose not to buy stuff from other small businesses because of the pain to stay in compliance.

This is yet another instance where the Party of the Little Guy is screwing the little guy, because they're not the proper little guys.

Diogenes · Post by **Diogenes** » Sat May 08, 2010 2:28 pm

MirariNefas wrote:
Diogenes wrote: Just bow to the hat William Tell.
Time to sell the hat and buy more shoes.

I'm not debating that this is an annoyance.

You are correct. My reply did not address the appropriate issue. It is my knee jerk reaction to the government telling anyone to do anything that has no benefit for the person being commanded.

MirariNefas wrote: But "This Government Never Misses a Chance to Screw the Little Guy? What the hell? This is a bigger headache for the big guys. This is a drain on the whole country when you look at it in the big picture. But the little guy gets a few more little forms. The topic name is hyperbole. The $600 dollar pizza business expense (and apparantly he only orders from one chain, over and over) is hyperbole. The 8 hours estimation is hyperbole. $500 lost is hyperbole.

I think the Pizza example is not a good example. Gasoline would be a better example. Just keeping track of which vendors you have purchased more than the threshold amount is an onerous job in and of itself.

I have said this before, and I will repeat it now. I often turn down work because I just don't want to deal with the tax aspect of it.

In any case, I have long suspected that the true purpose of the governmental rules we live under is to stifle upward (financial) mobility.
In this country, wealth and social status are more or less interchangeable, and people seriously resent anyone challenging their social status. What better way to keep uppity people in their place than by creating all sorts of rules that annoy the power brokers slightly, but bother, or seriously degrade up and commers greatly.

In other words, well to do people with connections support laws and regulations that make it more difficult for others to join their club. Especially the older money. (you know, the one's that didn't have to WORK for it.)

MirariNefas · Post by **MirariNefas** » Sat May 08, 2010 4:43 pm

And one burden not yet mentioned is the loss of business when small businesses choose not to buy stuff from other small businesses because of the pain to stay in compliance.

Yeah, I was thinking about that. It makes you want to shop around if you can stay under $600 for each business you buy from. It makes you want to buy from one supplier once you've reached $600 at that business. Bad for free market competition.

In any case, I have long suspected that the true purpose of the governmental rules we live under is to stifle upward (financial) mobility.
In this country, wealth and social status are more or less interchangeable, and people seriously resent anyone challenging their social status.

I actually agree with that. I'm not so sure it's a direct case of, "Let's keep them down," but maybe more, "Let's keep ourselves up and ignore everyone else," which has the same effect in a zero-sum system. If the SAT and our school systems didn't favor the children of the rich... we'd throw out the SAT and make a new test. The wealthy will send their kids to Ivy League schools, those kids will get connections and better jobs and stay wealthy.

Jccarlton · Post by **Jccarlton** » Sat May 08, 2010 10:26 pm

I actually agree with that. I'm not so sure it's a direct case of, "Let's keep them down," but maybe more, "Let's keep ourselves up and ignore everyone else," which has the same effect in a zero-sum system. If the SAT and our school systems didn't favor the children of the rich... we'd throw out the SAT and make a new test. The wealthy will send their kids to Ivy League schools, those kids will get connections and better jobs and stay wealthy.

And the graduates from the Ivy Covered Snob Factories get the inside track. I've seen the track from the fringes because of where i grew up and frankly the waste of it all discusts me. We got lucky that semiconductors created the boom it did, but the rent seekers are in power again and well, watch out.