Death Of 1000 Paper Cuts

Thanks To The Dim Dems

Inserted into the “Health Care Bill” is a provision guaranteed to cause many more ulcers.

EVERY expenditure by a business for goods or services over $600 will require a 1099 form to be filed.

If you are a transmission rebuilder, that will be every sale.

If you are a contractor who’s truck needs new tires, that will be a 1099 along with the mount and balance.

If you buy a new copier? 1099. How about that $700 flight to the business meeing? 1099. The hotel bill? 1099.

But even worse, it’s $600 PER YEAR. So that cell phone bill? Yup, 1099…

The mind just boggles….

Anyone who makes it to page 737 of the massive health-care bill approved by Congress in March will find a three-paragraph section that has nothing to do with hospitals, doctors, or drugs. The provision, inserted by Democrats on the Senate Finance Committee to help offset the cost of the bill, requires companies to report to the IRS payments of more than $600 a year to any vendor.

A bit further down we have:

Today, businesses must file 1099-MISC forms only for freelancers and other service providers that aren’t incorporated. The form is meant to make sure these workers pay taxes that the business would withhold if they were regular employees. The new rule, set to take effect in 2012, will expand such reporting to include payments to companies, and for goods as well as services. That means businesses will need to get tax ID numbers and file forms for almost all suppliers—and track all their small expenses to see which vendors meet the threshold. Spend $600 on cell-phone service, at FedEx, or fueling up at the local gas station? Better get their tax ID number. Buy new computers? File a 1099. “It’s going to be a compliance nightmare,” says Rob Seltzer, an accountant in Beverly Hills, Calif. He figures he would go from filing two 1099s to 15.

Seltzer is on the low end. The IRS says about 85 million 1099-MISC forms are filed each year, and that could jump significantly under the new law. The National Small Business Assn. estimates that the average company will have to file 95 of the forms under the measure, up from fewer than 20 today.

So as a first estimate, they go to about 500 Million 1099 forms. But I’m pretty sure that’s way low. I doubt that they have thought through how hard it is to spend LESS than $600 per year with any supplier of a business. Heck, the Bagel guy is likely to exceed that in just a few weeks of stocking the coffee room. And how many expense reports today that just ‘roll things up’ will now have to break it out by vendor? Spend a week on the road at 3 hotels? That’s very likely to be 3 Tax ID’s and 3 1099 forms. Fly on 3 airlines? Ditto. Take a couple of clients to a restaurant? 1099.

I think they will spike over a Billion 1099 forms “right quick”.

Then they will have to be included with the tax returns, which means accounting and auditing expenses will rise dramatically. Then the government will need to do something with all of them. Full employment through pushing papers from one desk to another? On your tax dollar?

Small Business Killer

This is just going to kill small business. They have no time nor resources to spend on this kind of stupidity. The example used on Kudlow and Company (CNBC) was a gold coin dealer. EVERY single sale or purchase of a gold coin (a one ounce coin is going for about $1200 now) will require that the 1099 info be collected. Silver coins under $600? I’d expect they will want to collect the 1099 info too. You can’t wait for the end of the year, you need to be able to figure out at the end of the year if you have had over $600 total with one person. And if they have stopped coming in?

When I was doing support work for IT services, it was VERY common to have equipment needs that meant a quick run to the store ( often “Fry’s”, that stocks a lot of stuff) and just slap it on the credit card, then expense it to the client later. Now you will either need to have the client do it and supply all the 1099 info, or you get to do TWO 1099s.

Buy a camera? 1099. Field trip for your department to Disneyland as a thank you? 1099.

If I’d been pondering going back into the business, this spikes it as a dead idea. There is no way on earth I’d step into that buzz saw now.

Time For A Tea Party?

If only the original Boston Tea Party participants could see how tied up in bogus tax rules we are today.

Now comes the watching. Will this be enough to push folks over the edge to taking some kind of action? Or are we just so many steers waiting for the second knife? (For the non-farmers, steers are different from bulls…)

The more I watch how congress “works”, the more I’m certain that the 16th Amendment gave them too much power and of the wrong kinds. Repeal the 16th, and remove the commerce clause while you are at it. We’ve seen that they are not responsible enough to use that power wisely.


About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
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45 Responses to Death Of 1000 Paper Cuts

  1. crosspatch says:

    This is absolutely insane. Every hairdresser on the planet is going to have to tally up all the receipts from every single supplier and if it comes to $600 or more at the end of the year, have to file a 1099.

    Other than “absolutely insane” I just can’t find anything stronger but it somehow doesn’t seem like enough. I owned my own business for several years. I know how hard it already is with the paperwork that one had to do back then (until 1996 when I gave it up).

    This is going to cost small operators dearly and greatly increase their tax preparation costs. I just don’t get it. And I do not understand the Democrats rationale for it, either. Here’s why. One figures that minorities are a major demographic for the Democratic Party. What is the number one employer of minorities? Themselves. Pick any minority and you will find that the number of self-employed is greater than the number that work for any other employer in the country. This is going to hit those people hard.

    It is just insane. There is no other word but I keep wanting/needing to say it. This *has* to be stopped and this is what we get from “we need to pass it so we can see what is in it” politics.

    This is going to be an absolutely epic year for one political party in this country.

  2. TNDbay says:

    When a dog bites your hand, do NOT pull away. You will lose pieces and bleed.
    Instead, shove your entire arm down that dog’s throat.

    You guys need to start thinking and stop talking.
    Start doing and stop losing.

    Where are your heroes? Is your worthiness sufficient to inspire one to appear?
    Heroes don’t flap their gums.
    Do you remember what a hero was – did you ever have one?

    (long ago)

  3. TNDbay says:

    There is nothing harder to do than something you have never tried before.

    There is nothing easier to do- and do well – than what you have practiced.

    You have got what you practiced. Why not try a different practice?

  4. TNDbay says:

    There is an old children’s story. It is about pancakes.
    Read it and learn what happens to you when you finish chasing around that tree, you tigers, you.

  5. ellis says:

    The IRS doesn’t even know how to implement the new law and are asking for public input-,,id=225029,00.html

    Also, this article explains how the IRS has already taken credit/debit card transactions off of the 1099 table.

  6. CoRev says:

    The impact? A hugely growing cash-based economy, and a active scoffing of this and a growing number of tax laws. IOW, Greece.

    Walking away shaking my head in amazement.

  7. E.M.Smith says:

    @Crosspatch: It’s worse than that… If your company pays for your haircuts when you are on the road, guess who’s going to need a 1099 reporting the HAIRDRESSER as a supplier!

    @TNDBay: I’ve already had one friend suggest “overcompliance” as a strategy. File a 1099 for every single thing you buy “just to be safe”… Nothing like following the letter of the rules completely to bollix up a rule based organization…

    @CoRev: I know that if I ever go to sell a gold coin, it will not be to a coin dealer. I’ll find someone who wants to buy it instead. At a 9% California sales tax and a 6% to 10% dealer “cut”, I’m much more interested in buying them from individuals than from a dealer too. I can see where really quickly the whole gold trade can migrate underground.

    I’m pretty sure other stuff will follow.

    I also suspect that this is a ‘camels nose’ to get folks used to tracking all steps of all ‘value added’ so a VAT Tax becomes just a tack-on to the 1099 process. (Well, you are already doing all the paperwork, we’re just going to institute a ‘fee’ to ‘recover our costs of processing it’ — then grow it over time.

    I also know that for the first time in over a decade I’m going to be sending money to a political movement. But it will not go to any politician currently in power nor to a current party running candidates. It’s going to go to The Tea Party. Heck, I may even donate some time. (Wonder if that will require a 1099 too?… Sigh.)

    If anyone is an incumbent democrat, I’d suggest polishing the ‘ol resume and looking into that dog catcher Civil Service job.

    This news is going to spread fast, and when you have 100% of small business against you, the “shop talk’ is only going to go one way. EVERY customer is likely to hear someone ‘talking dirt’ about this. Certainly every supplier will…

    The utter idiocy of it is stupendous. They think they will rake in $2 Billion. They won’t. That would take a PROFIT of about $6 Billion to $10 Billion being ‘unreported’ (and assuming about a 20% to 33% tax rate per business). This then implies a $60 Billion to $100 Billion SALES unreported. (assuming about an average 10% net profit per sale). Never going to happen. After all the added costs and money suck from this, there is unlikely to be much of any profit to tax.

    Somebody needs to slap these folks upside the head with a Laffer Curve and wake them up.

  8. TNDbay says:

    be helpful! get with the program! fill out 1099 for everybody you know and even people you don’t. help our presidink out a bit. no sense for us to complain when we could do something useful, eh?

    you could ruin the system in one month if you wanted to.

    there is no need to feel constrained to truth.
    some people you not only do NOT owe the truth, or anything else, but if you provide them information it will be used to harm you and you know this.
    therefore, be rational.

    winning can be easy and fun.
    trust me – losing is not sustainable and everybody engaged in it will be sold short = dumped.

    who wants to be a winner?
    ‘they’ do.
    how ’bout you?

  9. TNDbay says:

    contributions to political parties?

    yes, fresh leeches! the anemia has always been due to an insufficiency of leeches.

    i encourage self harmers – not for the simple joy of schadenfreude, but for the practical reason that they pollute the earth and make it unsafe for living human beings.

    once the prey is gone the leech population will decrease dramatically and life will be ever so much more congenial.

    only then.

  10. E.M.Smith says:


    I’m probably going to be living in a different country within a few years. Nuff said.

  11. hunter says:

    It means I will have to disclose my SS# to nearly everyone I do business with.
    Until now I have been disinclined to get involved with Tea Parties.
    Perhaps it is time to reconsider that.

  12. TNDbay says:

    You’re a good man.
    All the best to ya.

  13. E.M.Smith says:


    Yeah, I’d considered the ‘identity theft’ issues this raises, but decided the posting was already a bit on the long side.

    But consider how much fun it’s going to be with every single gardener getting the TIN of the company whose lawn they tend; and if you have a home business and use, oh, gardener services and / or maid services…

    I had a rental home. I had a guy prep the carpet for a sale of the property. Paid via check. About 2 months later, started having $39.99 and $9.99 taken each month from my checking account by a company named “Intertrans”. I called them up and asked why. They said, “to pay for the internet services I was using”.

    After a long discussion, the upshot was:

    1) They claimed they were simply a ‘transfer company’ that paid authorized internet purchases and so THEY could not stop taking the money. I had to tell the company issuing the bill to stop.

    2) They would not tell me who the company was, as that was private information. But since I was “using the service” it was up to me to contact them. (Even though I had never ever purchased anything via internet at that time…)

    3) I was pretty sure who had used the check info as I’d only ever written checks to places like the electric bill and the water bill. Until the one carpet cleaning guy.

    OK, I could see this was going to be a hard case, so I put on MY hard case act…

    2 Supervisors into it, they decided they could stop the payments after all, and that they could look into reversing the 3 months charges that were on the bill, but could not guarantee charges would not show up again. They also explained that it was via an electronic check and had been ‘validated’ with private information (that turned out to be name, address, and phone number, along with the check routing number. All printed on the check. I no longer provide phone numbers on any check. If they don’t like it, I don’t buy. So far, everyone takes the money without the phone number…)

    Good Enough.

    I went to my bank and found out ‘the rules’…

    If you have ANY Electronic Funds Transfer agreement AT ALL, then ANYONE can take the money out of your account. All they need is the “routing number” and “account number” that are in those funny magnetic ink characters at the bottom of the check and sufficient personal information to ‘verify’ the e-check. That being your name, address, and in this case, phone number. Though alternatively, SSN / TIN will do.

    OK, for E-transfers, you have 60 DAYS to dispute it, then there is NO RECOURSE. Unlike a charge card where you can dispute at any time and it’s the company that has to prove it; for e-transfers you get 60 and you can only ‘contest’ and hope. And Oh, BTW, if you have your paycheck auto-deposited, that’s an Electronic Funts Transfer agreement. Your boss can put in your pay check, or, if they wish, completely empty your account. If you wish to contest it, you can ask if they would pretty please put it back, maybe. Someday.

    BTW, that 60 days is from the TRANSACTION date. So say your bill is generated on the 2 nd of the month. On the 3 rd you get a bogus transaction. The statement is printed in 30 days (assume a 31 day month…). Now it goes into the mail for a week or two. You had better open that statement, verify it, get to the bank, AND fill out and turn in the dispute form within the next 2 weeks or you have NO RECOURSE – EVEN IF THE WITHDRAWN FUNDS WERE FRAUD.

    I suppose you could try suing the person who took the money, but don’t know if you could win.

    OK, I took out all but $1 in my checking account and left it open to see if Intertrans would reverse the charges. Then I opened a NEW checking account that I specifically had coded for NO Electronic Transfers of ANY Kind. Then I waited.

    1.5 months later, the charges to the account had been reversed and I closed that account.

    FWIW, the only ‘Electronic Transfer’ I had on the account was the bank issued card to use the automatic teller machine. No, not even a “debit card”. Just the ATM card. And I’d never done any other e-transfer of any kind.

    Sidebar: The 2 nd manager at Intertrans was making some off color suggestions about my ‘habits’ and I was not picking up on what he meant. Then he made off color suggestions about my spouse or kids maybe liking exotic reading. Finally, after some fulminating from me, he stated that the pattern of $39.99 and $9.99 was an internet Porn Site and maybe my family members had signed up when I was not watching closely. It was THAT which sent me into the tirade that got the agreement to reverse offered.

    I told him about the religious nature of my spouse (who flinches at words like Damn, does not like beer in the house, will not eat food cooked with wine in it, and refuses to see even R rated movies with me. A person who teaches school and attends church for the spiritual uplift, and would not even wear a bikini. Then proceeded to point out that my kids were 2 and 3 years old and unlikely to be surfing porn sites. Then I asked where to send the papers for the slander suit and the fraud filings… and mentioned the idea of a web posting on the topic and, at that time, various News Groups of interest. I’d already taken down everyones names and phone numbers.

    So now I have an account with an e-transfer agreement. Never any money in it beyond what is needed for the specific transfer. A different account has my cash and no EFT agreement, and I write checks to move money between them. Drives the bank nuts, but I don’t care.

    So the idea of handing out my SSN (or for a corporation, the TIN) to every Tom, Dick, and Harry carpet cleaner does not appeal to me.

    I can guarantee that there will be ‘rings’ set up to provide what looks like legitimate services just to harvest the info and do identity theft operations. Other rings will be paying to various clerks to provide the info from other businesses. It’s just too lucrative not to. So even if “joe the cement guy” who does your driveway is a good guy, are you sure the person who does the bookeeping is? And the minimum wage person doing the filing?

    Yeah, it’s going to be a mess…

    And I’m going to find ways to avoid participating. Not having a business is the major one.

    And I’m sure not going to be dealing with any gold coin dealers or having anyone do yard work or clean carpets that is not paid in cash.

  14. ScottH says:

    I don’t think were even beginning to digest the full impact of this provision yet. So far we’re focusing on the impact to small businesses, and there will be a TON of new filing from them.

    But start to think about the BIG companies, especially the companies that carry a service fleet like AT&T, Verizon, Time Warner, ADT, etc… that covers the nation. Every service tech is going to have to track where they get gas and get the TIN for those stations, the accounting staff is going to have to collate the information (in case a few service techs end up using the same station), and then file a 1099 for pretty much EVERY gas station in the nation…

    A billion 1099s? Ha, that’s the low ball number.

  15. This has to do with the cycles of the Sun and the current Saturn Uranus Jupiter opposition :-)
    Interesting times indeed! Buy more pop-corn!
    When did it happen before in world history? , at the end of the Roman maximum?. LOL, this time the New Church would be The Green Church, however they’ll need a lot of martyrs. Wow!, how convenient!

  16. LarryOldtimer says:

    It would add a fairly hefty cost, but the best way to end this nonsense is for small businesses to print the government required data, that is, what is required to be actualy given to IRS, on paper, box it, and send it by USPS. Do not file electronically. With as many pieces of paper possible.

    Could the USPS actually get it delivered to IRS, the IRS folk couldn’t dig their way through it to get to their offices with huge front-end loaders.

    “Men, we have to produce a pound of paper for every dollar we spend, so write big.” ~ government work

    Not time for a tea party movement, but rather a paper party movement.

  17. CO2 Realist says:

    The Chief said:

    “I’m probably going to be living in a different country within a few years. Nuff said.”

    I’m considering this as well, and I’m constantly amazed how many others have the same idea. Care to share your short list of countries?

  18. j ferguson says:

    The Chief said:

    “I’m probably going to be living in a different country within a few years. Nuff said.”

    Costa Rica seems the country du jour. They get along with their neighbors, have no military, spend a lot on education, like US ex-pats, etc. The place also seems inexpensive – good climate.

    Thailand might be another place. Locals like Americans and the Red Shirt Insurrections don’t involve farangs (that’s you).

    Friends have moved to France because they couldn’t stand it here. ‘Last place we lived on land, neighbors had moved from France because they couldn’t take it there anymore.

    I keep thinking about the guy who moved to Guadalcanal in
    l940 – but maybe that story is apocryphal.

    I suspect that it is really difficult to get a good reading on what it would really be like living in another country – especially if you , like E.M., are inclined to pay attention.

    A solution to the problem of being upset with what you find out by paying attention is to live somewhere where the “what’s going on” is totally alien (so to speak) to anything you care about. In other words, you could give a damn about what the locals have cooked up – so long as it isn’t you.

    You escape worrying by being irrelevant.

    But then you are confronted by problem of who to hang out with.

    There is plenty in literature about ex-pat communities the world over – which might best be summarized by, “if it isn’t like the homeland here, we’ll fake it amongst ourselves.”

    One of the reasons that so much great literature comes out of ex-pat communities is that the smart people that find themselves in such places, write to preserve their sanity.

    Somerset Maugham

    English in India , or for that matter anywhere else other than Blighty- particularly Portugal.

    SWMBO and I have thought a lot about this and have found it easier to fool ourselves about how great things are on land by not spending much time there. We live on a boat.

    There’s also the problem of where to put your assets. E.M. is much sharper on this than we are, so we accept that our financial situation will depend on what happens in the US and so we might as well be here.

    Living here offers the occasional opportunity to vote against someone who could really screw things up.


  19. j ferguson says:

    I might add, that internet access has allowed me to spend part of every day in the company of people who are a lot smarter than I am. Thank God they put up with me.

  20. Don’t go anywhere else, just buy more pop-corn!

  21. wolfwalker says:

    Chiefio wrote: “The more I watch how congress “works”, the more I’m certain that the 16th Amendment gave them too much power and of the wrong kinds. Repeal the 16th, and remove the commerce clause while you are at it. ”

    That’s overkill — repealing the commerce clause, that is. It’s a necessary part of national sovereignty. The problem is the way it’s been expanded by the Congress and the courts over the last 75 years.

    That said, I tend to agree on the arrant stupidity of the fascist health-takeover bill in general and the 1099 clause in particular. I do a bit of photography as one of several ways of making money. Digital cameras and lenses are appallingly expensive — one lens or camera body can be well over $600. Will I have to learn how to do 1099s and send one to the camera store?

  22. E.M.Smith says:

    I’ve considered Ireland, since we can get citizenship, then can head anywhere in the EU from there as the mood hits.

    Also Costa Rica (as noted) and I’m partial to the idea of Brazil, Argentina, or perhaps one of the little ones in between them (Paraguay, Uruguay) but don’t know much about them. There is / was a modestly large Mennonite and Amish community in that area (including parts of Argentina, I think), so other than the different language, there would be similar ‘roots’.

    Then there is Chile. I wasn’t thinking about it until a saw a film about Chile post dictatorship. The people are genuine and want to preserve freedoms. The place looked just like California. And they have great wine…

    I’d consider a “tropical Island” if I knew more about them. And while I’d be happy to live on a boat ( I did for a couple of years) my spouse would not (sea-sickness / dizzy issues).

    I have a slight fascination with the idea of French Guiana and / or Suriname and / or Guyana. Just don’t know much about them, but I do speak French better than Spanish (though I could refresh the Spanish pretty quickly) and they speak English in Guyana. Similarly, Belize is interesting as an English speaking place, but not so keen on the sporadic Hurricanes ;-)

    The pattern, though, is South America and / or Tropical Islands with an option for EU-Somewhere…

    I’d avoid S.E. Asia for no good reason (poor skills or no skills in the local languages, kind of overpopulated and I’m fond of fewer folks per acre) and would not even think of anywhere in the “Muslim World” as I like my beer and wine and do not desire to be killed for drinking it, nor banned from buying a beer. Sub-Sahara Africa is out due to the complete lack of any infrastructure until you hit the ‘post colonial’ areas where they have a chip on their shoulder about folks like me… European stock and American accent. Lethal combo in many places. Similarly, don’t think I’d fit in too well in Russia (never could master the language, and don’t want cold…) or China (no clue on the language and not keen on cultural immersion in that far different a place, also very crowded)

    At the end of the day, I’ll probably just get a boat for me and a dock on land with a house for her, somewhere in Florida, and park my money ‘off shore’ and trade offshore and sporadically wander between honey and money 8-)

    If we pick up the EU citizenship for me, I’d be really tempted to just show up in French Polynesia…

    As you can see, I’m still in the “Fantasy” stage… and I’ve not gotten down to the “they have what taxes and which weird laws?” stage.

    I sometimes have a fantasy of going to tropical islands and showing them how to make electricity with Lister type Diesel generators (cheap from India) run on local tropical oils, setting them free of the rest of the world. And being a part time computer and math teacher, just for the pleasure of it. Then I remember that these folks probably have a million dreamers a year wanting to ‘improve’ them and are quite happy to have me stay home. That’s when I ponder the quantity of T-Bills needed for the interest to match my bar bill in perpetuity on the beach…

  23. j ferguson says:

    Ireland is very attractive. I did a project there in 2000/01 and lived in Dublin for most of 18 moths. It was best place I ever lived, but I had no idea whatever of the local politics.

    I also felt they were more docile politically than we are here, but if that was an accurate perception, it could be because they are winding down from generations of really frightful political problems.

    I did see the beginnings of EU/EC regulatory encroachment on their local business – nuts, on damn near everything. Those that applied to procurements by government agencies like the one I was working for were astonishing and could only have been seen as good ideas by people who would never have had to actually get something done.

    There is also March.

    If you’re retired you can sit by and eat popcorn – or knit, assuming your net worth is sufficient to support the way you want to live with enough slack to survive a “crash.”

    Boat is avoidance of real estate.

    in the end, do you really want to be an ex-pat. Wifes tried it – Australia then Thailand. Loved both places but in the end, she didn’t like being an outsider to the degree that seems impossible to overcome. Yes, even in Australia.

    It may be that some of us are outsiders no matter where we are, so maybe this whole line of reasoning about being an ex-pat doesn’t apply to everyone.

  24. j ferguson says:

    I should probably add that my perception of political docility in Eire might have been a product of their courtesy – not wishing to burden me with their own problems.

  25. E.M.Smith says:

    @J Ferguson: Your points are why it will probably end up being a boat between honey and money…

    Getting the Spouse to move away from ‘family’ is darned near impossible. The idea of ‘out of California’ is palatable largely because of family in places like Texas and Florida. I could probably ‘push it’ to include Chile where she also has a couple of family members and Ireland (where be both have lots), but things like Brazil and Argentina are most like just the stuff of fantasies for me.

    She does like warm, beaches, and tropical islands, so there is a small hope there. Also a friend is married to a filipino lady (military, was stationed there and…) and is retired to the Philippines so that’s a possible.

    But yes, THE major limitation is the lack of adventure some fools see in a foreign land. So I’d expect at most I’ve got a few years of ‘vagabond travel’ with very long stays as opposed to actual immigration.


    It all depends on how bad it gets here.

    She’s already gone from “Don’t want to leave” to “In a year would be OK” and from “Texas” to “Texas and Ireland” and from “Now way Florida” to “Or maybe Florida” as the California economy has hit the rocks.

    I was ready to sell out at the top of the real estate boom and move to Florida ( I did convince a friend to do so, and hes’ sitting pretty) but the family was not willing. So far that’s cost me about $200,000. It’s painful being Casandra and seeing the future, while all around you think you are crazy for saying things like “This is a blow off top it’s time to sell and move away”…

    Oh Well.

    FWIW, one of my odder fantasies, one that I’m getting a bit too old to fully embrace, is to get an RV and start as far north as I can get (Fairbanks? Nome in August?) and head diagonally south, ending in the Florida Keys.

    I figure it would take about a year, perhaps two, to do it right. At 3 years I’d most likely be losing all interest in being on the road any longer ;-) so I’d not push it that far.

    And yes, I know it will never happen.

    But a small cottage in Ireland could.

  26. harrywr2 says:

    The Dims have thought this through.

    It’s step 1 for a VAT system.

    In any case, in practice what will happen is that the major business credit card companies will file your 1099’s for you for a fee.

    Most already will send you an annual spending report by merchant. Easy enough for them to add the Tax ID of the merchant and send the IRS an electronic file.

  27. Verity Jones says:

    @J Ferguson,

    “I did see the beginnings of EU/EC regulatory encroachment on their local business – nuts, on damn near everything. Those that applied to procurements by government agencies like the one I was working for were astonishing and could only have been seen as good ideas by people who would never have had to actually get something done.”

    The procurement rules are coming down from Europe and are increasingly all pervasive for public sector goods and services. Ireland, and several other European economies I can think of (France…?) probably resist this at the local level wherever possible because personalities and relationships still matter.

  28. j ferguson says:


    Filing 1099s for stuff in addition to services; It’s the salad bar.

    In the early ’80s a bunch of us ate at a storefront hot dog emporium a couple of times a week.

    It was a two person operation and the place was always jammed.

    One day, the owner, who could have passed for a junior exec at Arthur Anderson sat down for a chat with us.

    “You guys come in here pretty often, i wanted to thank you personally.”

    After some conversation, I asked what he was doing here since he seemed conspicuously sharper than he needed to be to run the place. (Other answers to this question have given me some astonishing stories – test is the guy is way too smart for what he seems to be doing, which always means something else is going on)

    He was unemployable in the sorts of places he might otherwise have worked because of some mischief from his teen years.

    We asked if the hot dog store business was a good one.

    “Outstanding, but it’s not the hot dogs, it’s the salad bar. I write off the entire contents of the salad bar every day. I replenish in Chinatown (Chicago) where everything is cash.

    Obviously I don’t need new salad bar ingredients every day so I can show this cost which I don’t entirely have and it reduces my apparent profit. And there’s no paperwork. Everybody does it. Cuts taxes”

    So the new 1099’s in addition to finally burying the feds in paperwork will stop games like this one.

    They will also enable the government to know a whole lot more about your business than you’d probably like.

    Think about that. I would worry far mor about that. Next thing would be that the Gov would get on your case because you aren’t buying enough stuff from some entitled group or another. They’s already have the ammo to go after you.

    There’s a lot to worry abut here.

    V Jones,

    EU reg. impacts in Ireland in 2001, when I was afflicted with them, were new. No-one wanted to cause a flap (which would cause trouble at the top of the agency) so we observed them to the letter. We had one area of exposure where it could have been possible for a machine tool manufacturer to force us to accept something we really really didn’t want, but fortunately his price was not low and also fortunately the equipment we really wanted was low.

    Much worrying for naught.

    BTW, civil engineers in Ireland and the British engineers on the project were a far wittier gang than I was used to in the US. My God, they even read non-technical books.

    If I ever have to go back to work – doubtful, I would want another assignment in Dublin – but not in March.

  29. kevoka says:

    EM Smith

    “I’ve considered Ireland, since we can get citizenship, then can head anywhere in the EU from there as the mood hits.”

    Ahh, yes, then you can become intimate with the virtues of the VAT…

    as harrywr2 says

    “It’s step 1 for a VAT system.”

  30. j ferguson says:

    I hate not being able to fix the typos after hitting send.

  31. LarryOldtimer says:

    This will only foment a substantially larger already large, underground, non taxpaying economy. Uncle Sam continues to print green trading stamps.

  32. @Kevoka
    It’s step 1 for a VAT system
    In some countries VAT system works nicely if bigger corporations are in charged of collecting or retaining it as tax collectors; so if you are going to get your paycheck for , say, a service you gave, tax is deducted directly from it.
    Deductables purchases will be only those dealing with the nature of your business.

  33. Verity Jones says:

    @j ferguson, I am intrigued as to what you have against March. St Patrick Day? Surely not – that is only one day.

    the worst thing about VAT is that you end up with a tax upon a tax. Road fuel duty is about 56p per litre added to a basic fuel cost of ~44p. VAT brings it up to ~£1.19 per litre. VAT is 17.5% So almost 10p of the VAT is tax on the fuel tax. There is a similar situation with alcohol and tobacco.

  34. j ferguson says:

    V jones,
    March in Dublin – horizontal rain moving by at 20-30 knots dark. cold, wet – very wet. – at 5:00pm. On the other hand, summers, spring and fall were a delight.

    If wife could handle the dark times better, I’d live there in second, but then as I said above, I had nothing but good experiences when I was there and I suspect I was sheltered from some of the challenges.

    I think I had to walk too far to get from office to hotel, which didn’t matter if it was sunny and nice.

  35. TIM CLARK says:

    Since we last discussed it many moons ago I’ve done some serious checking on foreign relocation.

    One thing you didn’t address in you next thread, i.e. Sovereign Risk, was country debtload. Regardless of how this USA mess turns out, IMHO countries with high debt load are not the place to be. So I looked up this statistic on the CIA world factbook page. You should too, lots of other good info.

    Costa Rica has an unsustainable debt load with relatively high petty crime rate and inflation. Scratch them.

    Argentina- even higher debt load. High cronic unemployment. Corrupt policia. My wife traveled there last year on business (Cargill) and the in-country subsidiary allocated a bodyguard to her almost full-time. nuff said-scratch Argentina.

    Brazil-Possibility. Protuguese is one strike (I speak spanish somewhat at least). Infrastructure another. Lots of arable land, but some farmers still haul their crop to market in donkey-carts. Lots of petty crime, especially in the big cities. Stable government, low debt load, ethanol.

    Uruguay-Getting better. good government. Cheapest living of all on my list. Healthcare a ?

    Chile – Low debt load. Government owns copper mining with big income. Stable workforce but w/ ~10% unemployment. Stable government with woman president. low crime rate. Low tax rate. Big disparity in incomes (Small middle class) . Land around Santiago not cheap, but further south not bad. Some pollution problems. Somewhat backward in housing and infrastructure. Cell service in places, phone within 100 mile radius of Santiago and two other large cities I believe. If you have $150,000 US to invest in an enterprise, or put in bank you can receive dual citizenship. Cost of living about 50% of USA, so not real cheap. Healthcare costs $, but can be had. Most electricity supplied by hydrogeneration. Probable where I’ll go if:

    The wife can adjust to the kids in USA.
    The sh#t hits the fans after I can withdraw IRA-401-k stock-options without penalty. Most money tied up except for my play money, which would get citizenship. I think we will visit there in the very near future.
    Otherwise, the in-laws farm in Nebraska will have to do.

  36. E.M.Smith says:

    @J Furguson: Just let me know, and I’ll edit. This is a small “family store” sized operation (i.e. it’s just me) and i’m not so over whelmed with volume that the occasional “it’s” can’t be turned into an “its”…

    @vjones: I am adamantly opposed to tobacco. It killed my Dad ( 40 years smoking unfiltered Camel cigarettes) and my Mom ( 2nd hand smoke of her Yankee husband, and worked as a waitress for many decades in restaurants full of smokers) both taken by “smoking related cancers” (even though mum never smoked).

    I, FWIW, have a strong tobacco allergy (common in children of non smoking mothers with smoking fathers). I’ve spent my whole life in misery from The Evil Weed.

    With that said:

    I have tobacco growing in m back yard. It’s the kind used for snuff and chaw rather than cigarettes ( I have that kind of seeds in the freezer). Tabaccum Robusta.


    Because I realize that it is about Personal Choice.

    Because if a comet hits the planet tomorrow or if the Katla volcano goes off or… whatever… Tobacco is a good ‘cash crop’ and I’d be well served to have it available as seed. And if someone does The Stupid Thing and starts smoking, as my otherwise bright Dad did, that’s not my responsibility, that is his.

    In my Father’s defense: He as a G.I. (Government Issue) during W.W.II and tobacco DOES increase the reflexes and speed of response. I might not exist but for his decision to take a “speed increase” at the risk of addiction during combat.

    Would he have died at 17 (yes, he lied about his age to enlist in the US Army at 17) had he NOT had the drug induced ‘surge” of tobacco? I can never know.

    But I can know that he made that pact with the Devil and it killed him; but after I was graduated from college, not before I was born.

    Could I make a similar “deal”? I doubt it. I’m maybe 1/2 the man he was. I have points where I’m stronger than he was, but that kind of Faustian Bargain is not among them.

    So I curse Tobacco. I despise it. And I have it in my list of ‘survival seeds’ and have some growing in my garden. AND I respect the right of anyone who uses it to “strike that bargain”; as I might not exist otherwise.

    No, I’m not picking on you. This is a general statement to the world. You just happen to have stepped on the trigger.

    FWIW, at about 8 year old I was instructed by my Dad in the details of the Nazi land mine designs. He was U.S. Army Combat Engineers and lifted live land mines for several years during W.W.II; so he thought I ought to know how to avoid being blown up…

  37. Verity Jones says:

    @j ferguson

    “March in Dublin – horizontal rain moving by at 20-30 knots dark. cold, wet – very wet.”

    You must have been lucky to experience that in March only ;-) Can happen in almost any month in Ireland (aside from the dark, that is). The best weather is often in May – sunny clear skies, just not guaranteed to be warm.

    I learned to my very great surprise when I moved to England that if the forecast said “30% chance of light rain” (in summer) that you could actually risk leaving coats and umbrellas at home, whereas the same forecast in Ireland, particularly in the West, means you will get rain.

    @E.M. I know you’re not picking on me but boy is that a light trigger you have ;-) I just mentioned the word. I seem to remember us having had a cigarette smoke conversation before. I am probably as adamantly opposed to it as you are (whereas a “tax on a tax” is just a gripe). My parents never smoked, but I did lose a few other relatives to it.

    Although I love the smell of proper tobacco before it is lit and I even don’t mind the occasional whiff of pipe smoke, I just abhor the smell of cigarettes. I had a housemate who smoked occasionally but ‘only in her room’. My room was a floor below hers in the attic and on the other side of the house but my sensitive nose could pick it up within a minute of her lighting up.

    Incidentally I modified your suggested fabric treatment for my car [if you remember my ‘new’ car had previously been owned by a smoker – a heavy smoker as it tuned out, a fact so successfully disguised for the sale that I thought it would not be a problem]. Instead of the sequential use of ammonia and vinegar you suggested, I used a solution of percarbonate intended for laundry use. It worked a treat, although I was a bit timid with it the first time.

    I do support personal choice (“If you choose to smoke around me don’t exhale because I choose not to breathe your smoke” ;-) and I’ve even done work for the tobacco industry and a nicotine patch manufacturer (although there are things I would not do for the tobacco industry because of my principles).

  38. j ferguson says:

    We’re anchored out at Onset, MA. This is the Thermometer Capital of the World having the Porter Collection numbering some 4100.

    E.M., to think you’d wondered where they’d gone. They’re here.

    @ V Jones On a visit to Vancouver BC and having a week of sunny weather during what was known as the rainy season, I asked about all the whining about overcast and rain. I was told there had never before been seven consecutive days like the ones we’d just enjoyed.

    Same experience in Ireland. Summer 2000 was hot enough to induce dozens of heat-stroke cases at an air show west of town – about 90F.

    I think it was a hot summer in England that year.

    In the 18 months I was there there were morning showers but nothing like the relentless day after day weeping that everyone talks about.

    @Tim Clark

    It makes sense to worry about the financial condition of the place to which you would emigrate. The news on Costa Rica was a surprise to me – but then I hadn’t looked because we’d rejected the place for reasons suggested in an earlier comment.

    Supposing that you can find a place you’d like without the risk, then the following question just wastes time, but….

    If your financial wherewithal is US based or located elsewhere in a reliable form, does the financial stability of your new home really matter?

    Assuming that you maintain a low profile so as not to arouse the locals and also that the indigenous population might not resort to violence when things fall apart, would the country’s financial state really matter?

    Chile seems an interesting choice. I worked for a Chilena structural engineer in Chicago in 1966. She and her family had left Chile in the early ’60s. They had been very wealthy. Her Grandfather wore a new pair of shoes every day (why???) and then slashed them with a knife so that no-one else could wear them. Think Scheherezade? Her toys included a chest of gold coins that they could pile up to make little towns and houses.

    She had no idea that this was unusual until she got to university of Illinois to go to engine school.

    I would think the place unstable if there is still much of this. Consider Red Shirt issues in Thailand.

  39. j ferguson says:

    In Chilena story above, substitute {done – EMS}
    It was an earlier generation for the shoe parade. Sorry.

    No-one who heard this story including Teresa was ever able to imagine why he did this. Could new shoes in Chile have been that comfortable or was this a kind of foot binding to prove that he was so rich he didn’t need to be useful?

    An interesting variation on Ferdinand Celine’s line “If you can’t be rich, appear to be useful.”

    Our family has appended “..if your not fooling anyone on the useful, try humor.”

  40. GregO says:


    Love your blog and I always learn new stuff here.

    Profoundly unsettling about the 1099s…I own a manufacturing business (what was I thinking?!? long story…) and after reading your blog went over to accounting and asked if they knew about this latest nonsense. Got blank stares. It will be interesting next time I meet with the CPA firm. After I get all the facts, I’ll contact my local representatives (as we all should on a regular basis) and give them #&*^& if this is literally what it appears.

    On the topic of cash, I had some time last year gone away from credit cards as much as possible and gone to cash because I was mad at the credit card companies for raising their rates. Now that I am in the habit of using cash I will never go back.

  41. Rod Smith says:

    Well, I’m an old dog — probably older than most other posters here at 79. I’m also a vet, and I’ll be damned if I’ll let any politician run me out of my country. If enough of us have the fortitude to hang together and say, “No!”, we may be able get it back on-track again.

    But I will not run, or even flinch, no matter how bad it may get. As Thomas Paine once said, “”Those who expect to reap the blessings of freedom, must, like men, undergo the fatigues of supporting it.”

    So be it!

  42. E.M.Smith says:

    One thing you didn’t address in you next thread, i.e. Sovereign Risk, was country debtload. Regardless of how this USA mess turns out, IMHO countries with high debt load are not the place to be. So I looked up this statistic on the CIA world factbook page. You should too, lots of other good info.

    I use the CIA Fact book fairly often. It’s a nice source. The debt matters if you are going to pay it. I’m looking at being somewhere interesting to be, where I don’t care much about the local stupidities. My money can live somewhere other than where I live, and as per VAT, well, it only matters if you buy stuff… Since I have more stuff than I need and I’m most likely to be getting rid of stuff instead of buying more, It will not impact me as much.

    And national levels of debt are fairly widely known already. Yeah, I probably ought to have said something about it, though.

    Basically, my mindset is more that of a perpetual tourist…

    And, as a US Citizen abroad, you get a ‘pass’ on income tax for some initial chunk. Last I looked it was about $75k/year. So I can dodge state income tax AND fed income tax on more than enough money to be a tourist…

    The two bits I care about the most are:

    How do the locals tax my INCOME (as I can expend anywhere…) and what happens if I die there? Who makes what claim on my estate?

    Both things I’ve not investigated, so that’s why the ‘list’ of places is so long and unsettled…

    Oddly, though, your relative preference list is roughly the same as mine. Chile at the top, Argentina an attractive near last… Brazil as a ‘so-so’ middle, but you have to pick the place to avoid the crime near cities (rather like the USA in that… I shudder to remember a drive through Jamaica New York after a wrong exit from the Freeway – Felt like a pork chop taking a tour of the wolves den… folks were definitely ‘checking me out’.)


    My Mom had a joke about visiting England. Said she was there for summer that year. July 18th it was…

    Per Tobacco: The tax on a tax happens here, too, on things that are deemed “bad”. I take this as a offensive behaviour as I do not agree with demonizing one product over another. You just gave me a platform to point out that some of us, who despise the weed, endorse the right of other folks to make up their own mind and NOT be victimized by the rest of us.

    Last I looked, a pack of cigarettes was about $5, subject to sales tax of 9%, and most of that $5 is taxes and penalties (including the indirect social wealth sharing of lawsuits holding the tobacco company liable for a personal decision.) The actual cost of the tobacco and packaging is maybe $1 and that’s being generous.

    It’s not so much the tobacco that bugs me (on this thread) as it is the vilification of one product over another. It’s just wrong for the Government to be picking favored industries.

    Oddly, I love the smell of a tobacconist shop and there are some pipe tobaccos that are wonderful… right up until they are lit! Then I run away…

    @GregO: I’m telling any merchants I know. With luck there will be a minor revolt. There has already been a statement that you can just let them cruise through all your credit cards and avoid the 1099. Half a loaf. I’ve got no interest in folks seeing every thing I buy.

    There was a time, when I was about 12 and younger, when we had a concept of “Medically Privileged Information” and you and your doctor could discuss things with privacy. No more. Now all medicine will be with politicians looking over your shoulder. Similarly, we had “Banking Privacy”. No more. (Frankly, given that they have full access already and if your tax return does not match the one they do for you for comparison, I wonder why the bother to make us do it. Just take the money and tell me what my return was, it would be more honest…)

    So I’m ‘mostly cash’ now, with very little on credit cards.

    I’ll be informing my doctor that I’m not interested in providing a weight, as the government does not need to know my BMI (Body Mass Index). Mine isn’t that bad, I just want to slap the system in a small way… (BMI is a broken metric, I may do a posting on it some day…)

    So one of the things I’m wondering about is where in the world there is still a place to live with some kind of privacy. You can get some just be being mobile and leaving only a year or so of information in any one place, but that seems a bit extreme to me.

    I do wonder just how many folks appreciate the potential for abuse when your government has your BMI, food purchase history, liver enzymes, “blue pill” prescription if any, history of STD lab tests, etc. etc.

    J. Edgar Hoover had a ‘file’ on many politicians and used it to get his own way. That was finally stamped out after he died. But that is nothing when compared to a full purchase history, ‘fast pass’ history, banking history, Onstar history, and medical history. Lord help any politician that had an undisclosed abortion, takes the little blue pill, was treated for an STD or drug problem, or just takes an unexplained drive every Tuesday evening that does not go to their poker game… They will be owned by the power structure.

    I can only hope that the politicians being nailed via the text message and email logs THEY mandated will realize that living in a surveillance society is a bad thing.

    @J Ferguson

    I saw a statement that Jerry Lewis would only wear new shirts, never washed, one each day. Money lets you indulge fetishes…

    @Rod Smith:

    I agree with the idea, we’ll find out in November. A lot of folks just ignored their government for decades. Many of them have stopped ignoring it…

    If there is evidence of progress, I’ll ‘fight the good fight’. If it becomes clearly hopeless, I’ll retreat to some other country. (But a retreat is not a capitulation…)

    I will not give up on the dream that was America. I regularly remind folks of what we have already lost in the hope that some small number will realize what could be again.

  43. P.G. Sharrow says:

    Keep up the battle. Actually you are winning, things change slowly and the American dream will survive and be restored.

    E.M. you can’t hide, you are part of the solution, keep up the good work. pg

  44. E.M.Smith says:

    @P.G. Sharrow:

    I was unaware that being on TV a few times and regularly running a blog was “hiding” ;-)

    No intention to hide, just an intention to optimize my quality of life inside the available money stream and political climates of choice…

  45. j ferguson says:

    E.M., Comrades,

    I’ve just realized a more insidious possibility for this new 1099 infliction.

    With the information gleaned from these submittals in addition to the W2’s and other things already in their hands, it may become possible for the government to have such a complete picture of your financial operations that they can invoice you for your income tax.

    I understand, possibly wrongly, that we in the US are one of the very few polities worldwide who figure their own taxes.

    I don’t doubt for a minute that this citizenly duty is looked on by those who would more completely control us as full of risk that the government will not get its full share.

    I certainly meet enough people who have set out to make sure the government doesn’t get its share – see salad bar story above.

    If this were to happen, I would very much miss the early April ritual of pouring the Ballantines in a glass with some ice and a little water, and going through the thing myself.

    I thought it was an exercise in citizenship – a seasonal opportunity to share the burden, and this despite hating many of the things the money would be spent on.

    If it ever does come to just paying another bill, we’ll have lost something.

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