What Congress Slipped Into Your Health Care Bill

Back on May 5th, Silver Circle director, Pasha Roberts, took note of an amendment to the Health Care Bill that couldn’t have less to do with health care. On his Facebook, he wrote,

WTF – 1099 forms for almost every business transaction? What are these guys thinking? Curses at this first of probably many “hidden consequences” of the health care insurance bill. · Comment · Like ·

Here, Pasha refers to a CNN article that called attention to “Section 9006 of the health care bill. Just a few lines buried in the 2,409-page document mandates that beginning in 2012 all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year. The stealth change radically alters the nature of 1099s and means businesses will have to issue millions of new tax documents each year.” Translation: Bureaucratic Nightmare.

Allow me to explain. 1099 forms are usually used by companies to report the incomes of their employees to the IRS so that they can be taxed. So if you were ever paid “under the table,” your boss did not fill out a 1099 form.

But starting in 2012, companies will also have to fill out a 1099 form every time they buy more than $600 in goods or services from an individual or company per year. While $600 may seem like a lot to you, for a company buying in bulk this is gravy, and may mean every staples and BJ’s bill (here at Silver Circle, this would mean just my Nature Valley Bar tab alone).

So how does this amendment have to do with health care in the first place? Presumably, Congress slipped it in the Health Care Bill to help pay for it, “The IRS estimates that the federal government loses more than $300 billion each year in tax revenue on income that goes unreported. Using 1099s to document millions of transactions that now go untracked is one way to begin to close the gap” (CNN).

But even Pasha didn’t predict the “hidden consequence” of this bill for precious metals traders, who have been up in arms ever since ABC broke the story on July 21st. $600 worth of gold is only half an ounce, meaning that by 2012, bullion dealers will have to fill out a form for practically every transaction they make, “Coin dealers not only buy for their inventory from other dealers, but also with great frequency from the public…Most other types of businesses will have a limited number of suppliers from which they buy their goods and products for resale,” explains the article.

I spoke with one refiner who stated that if the law was not repealed, he’d stop selling gold coins in 2012 because, “I just don’t want to deal with it.” But the problem goes beyond just paperwork, as Pasha was quick to point out.

Hidden in the Health Care Bill that was ramrodded into law: Starting Jan 1 2012, the gov will track all real precious metal transactions. The stuff in our movie is already coming true…. · Comment · Like ·

“Currently, 1099 forms are used to track and report the miscellaneous income associated with services rendered by independent contractors or self-employed individuals” (ABC), yet soon they will be used to track and report our gold.

The question is, do we want government officials to know where every gold coin in the United States is at any given moment? Though I do not support Goldline abusing the threat of governmental control of currency to mark up antique coins, we shouldn’t disregard the threat along with our confidence in Goldline and Glenn Beck’s two-tone hair. An amendment to track gold doesn’t seem so far from an amendment to confiscate it. This may sound like a conspiracy theory, but so would have a plan for every gold transaction to be tracked with a 1099 form just a month ago.

Whatever the intention of this bill, it increases the government’s knowledge to no conceivable ends, while placing a hefty burden on small businesses. Thankfully, “Rep. Daniel Lungren, R-Calif., has introduced legislation to repeal the section of the health care bill that would trigger the new tax reporting requirement…Everyone agrees that small businesses are job creators and the engine which drives the American economy. I am dumfounded that this Administration is doing all it can to make it more difficult for businesses to succeed rather than doing all it can to help them grow,” he opines, according to a Zero Hedge article.

To see the actual amendment in the Health Care Bill, click here.