Posts Tagged ‘unintended effects’

Amendment Slipped Into Health Care Legislation Would Track, Tax Coin and Bullion Transactions

By RICH BLAKE, ABC News, July 21, 2010

Those already outraged by the president’s health care legislation now have a new bone of contention — a scarcely noticed tack-on provision to the law that puts gold coin buyers and sellers under closer government scrutiny.

The issue is rising to the fore just as gold coin dealers are attracting attention over sales tactics.

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.

Coin Dealers Flipping

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.

Read more at http://abcnews.go.com/Business/gold-coin-dealers-decry-tax-law/story?id=11211611

Its not just about gold coins.

This Form 1099 requirement hasn’t been publicized much, but will be a BIG problem for business.

Heritage.com Blog, Posted May 26th, 2010

What happens when a state is lucky enough to have one of their Senators ascend to one of the three most powerful committee chairmanships? According to a new study by three Harvard Business School the average state then experiences a 40 to 50 percent increase in earmark spending (the figure is a smaller 20% for powerful House committees). So this new government spending is then a boon to the state right? The public spending stimulates economic growth right? Wrong. Turns out, increased federal spending is connected with a decrease in corporate capital expenditures and employment. Study co-author Joshua Coval explains why:

Some of the dollars directly supplant private-sector activity—they literally undertake projects the private sector was planning to do on its own. The Tennessee Valley Authority of 1933 is perhaps the most famous example of this. Other dollars appear to indirectly crowd out private firms by hiring away employees and the like. … But we suspect that a third and potentially quite strong effect is the uncertainty that is created by government involvement.

Read more at http://blog.heritage.org/2010/05/26/harvard-reports-you-decide-more-government-spending-means-fewer-jobs/

By Shawn Tully, senior editor at large, May 6, 2010

(Fortune) — The great mystery surrounding the historic health care bill is how the corporations that provide coverage for most Americans — coverage they know and prize — will react to the new law’s radically different regime of subsidies, penalties, and taxes. Now, we’re getting a remarkable inside look at the options AT&T, Deere, and other big companies are weighing to deal with the new legislation.

Internal documents recently reviewed by Fortune, originally requested by Congress, show what the bill’s critics predicted, and what its champions dreaded: many large companies are examining a course that was heretofore unthinkable, dumping the health care coverage they provide to their workers in exchange for paying penalty fees to the government.

That would dismantle the employer-based system that has reigned since World War II. It would also seem to contradict President Obama’s statements that Americans who like their current plans could keep them. And as we’ll see, it would hugely magnify the projected costs for the bill, which controls deficits only by assuming that America’s employers would remain the backbone of the nation’s health care system.

Hence, health-care reform risks becoming a victim of unintended consequences. Amazingly, the corporate documents that prove this point became public because of a different set of unintended consequences: they told a story far different than the one the politicians who demanded them expected.

Read more at http://money.cnn.com/2010/05/05/news/companies/dropping_benefits.fortune/

by Ed Morrissey, hotair.com, April 1, 2010

Yesterday, I spent a little time at a local pizzeria to find out more about the impact of the new federal menu mandate in the real world. Davanni’s has 21 locations throughout the Twin Cities, a smaller, local chain that suddenly must now comply with this federal requirement to publish the caloric content of each of its menu items on all of its printed presentations. However, these restaurants have a problem when they offer their customers a wide range and high number of options - as most pizzerias do. Ken Schelper, a Vice President of Davanni’s, sat down with me yesterday to explain just how costly this new mandate is, and how difficult compliance will be:

Read more at http://hotair.com/archives/2010/04/01/exclusive-the-new-federal-menu-mandate-meets-the-real-world/

by By C. MacLeod Fuller, American Thinker, April 2, 2010

Now that health care reform in the shabby disguise of ObamaCare has been crammed through Congress, a peek at the president’s precariously stacked dominoes confirms that sooner than you may suppose, there won’t be any private companies selling health insurance in America. Consider:

There are approximately 1,300 insurance companies in America today.

Beginning January 1, 2011, these companies will be required to pay out 85% of all premiums collected as direct medical care, leaving 15% of corporate income to fund operations and yield any potential profit.

The health care industry has a profit margin of about 3%. Most American businesses rely on securing annual profits of 8% to 10%. American oil companies operate on about 4% profit. Alcoholic beverage sales net annual profits of 26%.

To maintain even slim profitability or cash reserves, insurers will be compelled to run austerely.

–SNIP– Finally, “risk pools” will have filled — overpopulated with people who have rarely or never paid into the health care system before and who, even if not extremely or expensively ill, will contribute to the crisis of underfunded overutilization. Insurance companies will run out of costs to cut and people to lay off. They will cease to do business, existing only as collection points for government oversight. Taxes will rise exorbitantly to pay for “free” universal health care. Socialized medicine will reign.

Americans will have the single-payer health care system President Obama and the extreme Left-dominated Democrat Party and Congress have explicitly schemed towards for seven decades: the federal government. And the system will no doubt be underwritten by confiscatory taxation.

One-sixth of the United States economy will transform into an even larger percentage due to the complete destruction of an industry, hugely magnified unemployment, and overutilization of underfunded, mandated medical care and resources.

Read more at http://www.americanthinker.com/2010/04/obamacares_economic_dominoes.html