With news on Goldman Sachs and Greece dominating the news let’s take a look at some other significant stories the past week you may have missed.
1099 Mandate From Hell Slipped into Health Bill
The CATO Organization is noting Costly IRS Mandate Slipped into Health Bill
In a recent summary, tax information firm RIA notes the types of transactions covered by the new 1099 rules…
Basically, businesses will have to issue 1099s whenever they do more than $600 of business with another entity in a year. For the $14 trillion U.S. economy, that’s a hell of a lot of 1099s. When a business buys a $1,000 used car, it will have to gather information on the seller and mail 1099s to the seller and the IRS. When a small shop owner pays her rent, she will have to send a 1099 to the landlord and IRS. Recipients of the vast flood of these forms will have to match them with existing accounting records. There will be huge numbers of errors and mismatches, which will probably generate many costly battles with the IRS.
Tax CPA Chris Hesse of LeMaster Daniels tells me:
Under the health legislation, the IRS could be receiving billions of more documents. Under current law, businesses send Forms 1099 for payments of rent, interest, dividends, and non-employee services when such payments are to entities other than corporations. Under the new law, businesses will be required to send a 1099 to other businesses for virtually all purchases. And for the first time, 1099s are to be sent to corporations. This is a huge new imposition on American business, costing the private economy much more than any additional tax that the IRS might collect as a result.
The Air Conditioner Contractors of America said:
The House bill would extend the Form 1099 filing requirement to ALL vendors (including corporate) to which they pay more than $600 annually for services or property. Consider all the payments a small business makes in the course of business, paying for things such as computers, software, office supplies, and fuel to services, including janitorial services, coffee services, and package delivery services.
In order to file all these 1099s, you’ll need to collect the necessary information from all your service providers. In order to comply with the law, you would have to get a Taxpayer Information Number or TIN from the business. If the vendor does not supply you with a TIN, you are obligated to withhold on your payments.
Clearly this is insanity. If enacted, it will be the most widely ignored IRS regulation in history.
Obama Administration Global Warming Profiteering
Pajamas Media is highlighting More Global Warming Profiteering by Obama Energy Official
Surprising documents made available to this author reveal that Assistant Secretary of Energy Cathy Zoi has a huge financial stake in companies likely to profit from the Obama administration’s “green” policies.
Zoi, who left her position as CEO of the Alliance for Climate Protection — founded by Al Gore — to serve as assistant secretary for energy efficiency and renewable energy, now manages billions in “green jobs” funding. But the disclosure documents show that Zoi not only is in a position to affect the fortunes of her previous employer, ex-Vice President Al Gore, but that she herself has large holdings in two firms that could directly profit from policies proposed by the Department of Energy.
Among Zoi’s holdings are shares in Serious Materials, Inc., the previously sleepy, now bustling, friend of the Obama White House whose public policy operation is headed by her husband. Between them, Zoi and her husband hold 120,000 shares in Serious Materials, as well as stock options. Reporter John Stossel has already explored what he sees as the “crony capitalism” implied by Zoi being so able to influence the fortunes of a company to which she is so closely associated.
In addition, the disclosure forms reflect that Zoi holds between $250,000 and $500,000 in “founders shares” in Landis+Gyr, a Swiss “smart meter” firm. She also still owns between $15,000 and $50,000 in ordinary shares.
“Smart meters,” put simply, are electric meters that return information about customer power usage to the power company immediately and allow a power company to control the amount of power a customer can consume. These smart meters are a central component of the Obama administration’s plans to reduce electricity consumption as part of the “smart grid.”
Conflict of interest anyone?
Fannie Mae owns patent on residential ‘cap and trade’ exchange
The Washington Examiner reports Fannie Mae owns patent on residential ‘cap and trade’ exchange
When he wasn’t busy helping create a $127 billion mess for taxpayers to clean up, former Fannie Mae Chief Executive Officer Franklin Raines, two of his top underlings and select individuals in the “green” movement were inventing a patented system to trade residential carbon credits.
The patent, which Fannie Mae confirmed it still owns with Cantor Fitzgerald subsidiary CO2e.com, gives the mortgage giant a lock on the fledgling carbon trading market, thus also giving it a major financial stake in the success of cap-and-trade legislation.
The patent, which covers both the “cap” and “trade” parts of Obama’s top domestic energy initiation, gives Fannie Mae proprietary control over an automated trading system that pools and sells credits for hard-to-quantify residential carbon reduction efforts (such as solar panels and high-efficiency appliances) to companies and utilities that don’t meet emission reduction targets. Depending on where the Environmental Protection Agency sets arbitrary CO2 standards, that could be every company in America.
So Fannie Mae, a quasi-governmental entity whose congressionally mandated mission is to make housing more affordable, has been a behind-the-scenes participant in a carbon trading scheme that would do just the opposite.
Layoffs at casino in Bethlehem
Philly.com is discussing Layoffs at casino in Bethlehem
Less than a year after a grand opening that rivaled the glitz and glamour of a Las Vegas revue, Sands Casino Resort in Bethlehem is laying off 80 employees.
The 9 percent reduction brings the casino’s workforce to 780, down from its current 860, and nearly 200 fewer than when it opened last May 22 with 3,000 slot machines.
Slots revenue is taxed at 55 percent in Pennsylvania, compared with 9.25 percent in New Jersey. Pennsylvania uses the gambling proceeds toward property-tax relief (wage-tax relief in Philadelphia) and aiding the horse-racing industry.
Look at the insanity of it all. Imagine using slot revenue to prop horse betting. What’s next, using internet bingo to prop up casinos?
There are only so many consumer entertainment dollars out there. What people spend at the casino does not go to the horse track or to movies or to eating out elsewhere. No jobs are created out of these maneuvers although there may be some slight shifting of jobs from one community to the next.
Harrisburg, Pennsylvania, Council Told to Consider Bankruptcy
Bloomberg is reporting Harrisburg, Pennsylvania, Council Told to Consider Bankruptcy
Harrisburg, Pennsylvania, which has missed $6 million in debt payments since Jan. 1, should consider seeking Chapter 9 bankruptcy protection, City Controller Dan Miller told a three-hour special committee hearing.
Harrisburg, the capital of Pennsylvania, the sixth-most populous U.S. state, has guaranteed payments on $282 million in bonds on the incinerator, run by the Harrisburg Authority. The payments on the bonds and on a working-capital loan this year add up to four times the amount the city collects in property taxes each year, budget documents show.
The city this month skipped a $637,500 payment due on a loan to Fairfield, New Jersey-based Covanta Holding Corp., operator of the incinerator.
On April 23, the Harrisburg Authority told the city that it won’t make a $425,282 payment due May 1 on a $17 million bond issue the city has guaranteed, said Robert Kroboth, interim finance manager. Kroboth said it isn’t likely that the city will honor its guarantee, meaning the payment will fall to the bond’s insurer, Hamilton, Bermuda-based Assured Guaranty Municipal Corp.
A decision other than bankruptcy is lunacy. The sooner Harrisburg files the better. Los Angeles and Houston ought to do the same.
Union Prohibits Weekend Volunteer Work Party To Fix Elementary School
The News Tribune reports Union squelches Tacoma school volunteers at weekend work party
Volunteers at a weekend work party at Fawcett Elementary School in East Tacoma came prepared to get their hands dirty.
But some say they felt like they were working with one grubby hand tied behind their backs last weekend due to school district and union rules.
“There was a lot of work that could have been done, but wasn’t,” said Ron Joslin, whose daughter is a third-grader at the school.
Tacoma Public Schools spokesman Dan Voelpel said the district appreciates volunteer efforts to help make schools better, but there’s a protocol for volunteer cleanups. First, volunteers must fill out a form detailing what the work party plans to do.
“Our buildings and grounds supervisory staff need to review it to make sure that what people want to do is safe and up to school standards,” Voelpel said. “And we have to, by union contract, notify the unions affected. They can determine if the work being performed substantially takes away from union labor. They can object to the work proposed.”
Mark Martinez, executive secretary for the Pierce County Building and Construction Trades Council, put it this way: “Sometimes people don’t appreciate our craft.” His union represents an estimated 60 Tacoma schools employees.
Parents say one of the vetoed Fawcett projects would have removed overgrown bushes that block views of the street from the school. Other proposed projects that didn’t happen include painting a Fawcett Falcons mascot on a school wall and spreading 40 yards of beauty bark on school playgrounds and elsewhere.
No, Mark Martinez, I do not appreciate your craft because your “craft” is nothing but bloodsucking.
Please consider KCTV5 INVESTIGATION: Taxing Trip
In 2001, Congress passed a law mandating every school district in America provide its homeless kids with a ride to and from school. For example, a school could be required to pick up a child at a shelter in Kansas City and drive them to an Olathe school every day.
While it seemed like a good idea in sound economic times, the recession has exploded the number of homeless students who need help.
But transporting kids to their original schools comes at a staggering cost. In Olathe, the district will pay $44,000 to transport kids this year. In Shawnee Mission, the tab is $150,000. The Kansas City, Mo., district will spend $194,000. And in Kansas City, Kan., the district served 471 homeless students and spent $295,000 transporting the kids.
Here is a 6 minute video that shows what the kids have to endure.
Mervyn King Warns UK Will Hate The Next Government, No Matter Who Wins
The Times Online reports Austerity Britain will hate its new Government, says King
The Governor of the Bank of England was at the centre of an electoral storm last night after saying that the austerity measures needed to tackle Britain’s budget deficit would be so unpopular that whoever wins next week would not get back into government for a generation.
The Governor’s prediction was made to the American economist David Hale, who passed on the remarks in an Australian television interview. Mr Hale, who has known Mr King for many years, was commenting on debt levels in major economies when he turned to the British election. “I saw the Governor of the Bank of England last week when I was in London, and he told me whoever wins this election will be out of power for a whole generation because of how tough the fiscal austerity will have to be,” he said.
Analysts have said that without commitment to severe austerity in the first weeks of a new Government, Britain could be heading towards a sterling crisis and a boycott of the gilts market.
The National Institute for Economic and Social Research said yesterday that whoever was in power by 2015 would have to raise the basic rate of income tax by 6p to reduce the budget deficit down towards 3 per cent.
That would be on top of cutting spending by an extra £30 billion in spending cuts and raising taxes to meet current targets. NIESR thinks the further tightening, in addition to what are expected to be the deepest cuts for half a century, is needed because the Government has been too optimistic about its economic assumptions. Simon Kirby, one of the report’s authors, said: “It will be a shock and very painful for almost everyone.”
Shock and pain for nearly everyone sounds about right. The same holds true for the US.