First, this law affects every small business transaction over $600 per year, so if you're a pizza shop and buy $750 worth of flour and tomatoes or whatever, both parties have to fill out an IRS form 1099. This is an absurdly low amount and almost at the level of requiring a 1099 for every small business transaction. If you buy a central air conditioner for your house, the contractor and the supplier he buys from will both have to fill them out.
Section 9006 of the Patient Protection and Affordable Care Act will amend the Internal Revenue Code to expand the scope of Form 1099. Currently, 1099 forms are used to track and report the miscellaneous income associated with services rendered by independent contractors or self-employed individuals.Gold coin dealers are concerned because, with gold prices at around $1175, a sale of a single coin to a single person gets a 1099 form. In the case of a dealer selling to an individual, the way I read this, only the seller fills out the form.
Starting Jan. 1, 2012, Form 1099s will become a means of reporting to the Internal Revenue Service the purchases of all goods and services by small businesses and self-employed people that exceed $600 during a calendar year. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change.
One dealer says,
(he) estimates that he'll be filling out between 10,000 and 20,000 tax forms per year after the new law takes effect.It's important to recognize this isn't a tax on gold coin transactions. It is a tax on every small business transaction there is. I'm a fan of the axiom "that which can't continue won't continue". Prices for everything sold in the country can be affected - so they will be. If it suddenly costs a company an extra $100 for Mrs. Ferdburger's air conditioner, that cost - by definition - gets passed on to Mrs. Ferdburger. In the gold coin realm, you can now buy a single American gold eagle for around $75 over spot. That will go up to reflect the higher costs for the sellers.
That ought to wipe out any semblance of an economic recovery. Every item that costs over $600 per year to sell will go up in price. That pretty much covers everything north of Wrigley's gum in price, for even a corner store.
It seems easy to predict that supplies of some items will go away, or they'll become hard to find. It won't necessarily be precious metals. There is an opportunity for some software company that can automate this process and help keep form 1099-related costs down to make a lot of money.
That's the problem. The symptom is that this tax attack was not in a tax bill, it was in Section 9006 of the Health Care Bill. How many more turds are buried in there? What about the similarly sized financial bill that just passed? How many turds in there? There are predictions of hundreds of rules that have to be created to implement just the finance bill. What about the stimulus plan? Did you hear the Stimulus plan, one of the first thing the regime passed, includes a government plan to monitor your body mass index? What does that have to do with economic stimulus? When you pass 2000 page laws that are more like cat litterboxes than legislation, don't be surprised if you find turds in them.
This is one reason to side with those who say we can't vote our way out of this mess. You can't sue to stop Obamacare; you need to tear up all 2200 pages, close down all of the bureaucracies that opened, and send all those new government employee droids home. Ain't gonna happen by electing the elephants.
It's like going to the doctor for some annoying problem and discovering it's a symptom of cancer. This administration is more hostile to American life than anything I can compare to. They're a cancer to the US.
|The soon-to-be much more expensive American Eagle|