Neil deMause

Still more on those changes to 1099 tax form filings for small businesses and the self-employed:

The massive expansion of requirements for businesses to file 1099 tax forms that was hidden in the 2,409-page health reform bill took many by surprise when it came to light last month. But it’s just one piece of a years-long legislative stealth campaign to create ways for the federal government to track down unreported income.

The result: A blizzard of new tax forms that the Internal Revenue Service will begin rolling out next year… [read more]

Okay, maybe the crazy right-wingers who think the health care reform law will bring about the end of civilization have a case after all:

NEW YORK (CNNMoney.com) — An all-but-overlooked provision of the health reform law is threatening to swamp U.S. businesses with a flood of new tax paperwork.

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… [read more]

This article almost, but not quite, made it into a publication that shall remain nameless. Kill fee in hand, I now make it available to you here, free of charge.

On the scale of recent Albany misdeeds – Client 9, a legislator expelled for playing Freddy Krueger with his girlfriend’s face, rival state senate factions facing off with separate gavels – the state legislature missing its budget deadline last week wasn’t especially egregious. It wasn’t even novel: In all but two of the last 26 years, the budget has been late, making this a beloved New York tradition.

This year’s Albany stalemate, though, has higher stakes…

My first article for the relaunched City Limits, about the doomsday budgets proposed for New York city and state, is up. (It’s actually the second article I wrote for them, but is running first — I blame the suits at Fox.)

Economists say the nation’s recession is technically over, but whether or not the economy is actually on the mend, the recession’s impact on New York City and state budgets is only just beginning. Over the last three months, Gov. Paterson and Mayor Bloomberg have mapped out a set of austerity budgets that would slash billions in spending – with many of the reductions coming from education and social services.

This year marks a watershed for both City Hall and Albany, but for different reasons, says James Parrott, chief economist at the left-leaning Fiscal Policy Institute, which earlier this month issued extensive briefings on both the state and city budgets… [read more]

Health Savings Accounts, the Bush-spawned health insurance plans that have been derided as a mere tax dodge for the rich, are either in danger of being phased out under health reform, or likely to carry on unimpeded. You make the call:

While Washington wrangles over health care, the nation’s last big reform innovation faces an uncertain future. Health Savings Accounts, the hybrid of flex spending accounts and IRAs that President Bush created in 2003, are an afterthought in the current proposals on Capitol Hill — with strenuous debate over whether their demise would be a disaster or a welcome end to a program that never lived up to its promise…. [read more]

The great Emmanuel Saez has done it again:

Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928, according to an analysis of newly released IRS data by economists Thomas Piketty and Emmanuel Saez.

The truly stunning part of this: If you look at CBPP’s accompanying chart, the disparity in who’s getting the embiggened piece of the pie was way higher during the ’00s than during the ’90s or ’80s — basically, the Aughts saw the rich getting richer while everyone else treaded water in a way that hasn’t been seen since the days of Ponzi himself. And while Saez sees the wealthy coming back to earth a bit thanks to the Great Recession, it may not last long, notes CBPP: “Whether the highest income households will once more capture a highly disproportionate share of income gains as the economy begins to recover is uncertain, but Saez, along with Harvard economist Lawrence Katz, points to previous recessions and notes that only major policy shifts like the New Deal have prevented income concentration from ‘bouncing back’ after a decline.”

Major policy shifts like the New Deal? Oh yeah, I remember when we used to still dream about those…

Under the guise of tax reform, New York’s mayor and city council speaker are trying to push through a loophole for large interstate corporations:

You might think that the middle of a recession spawned by massive corporate malfeasance wouldn’t be the best time to propose a giant tax break for corporations. But then, if you’re Mayor Mike Bloomberg and Council Speaker Christine Quinn, you might not. Crain’s reports today that the dynamic duo of City Hall has begun a major push to cut taxes for city corporations by $2.7 billion over the next decade, a gift that could eventually be worth more than half a billion dollars a year to city businesses.”… [read more]

Note: Obviously the last line of this article became outdated after the 3 p.m. coup in Albany.

The New York City Independent Budget Office has released its eagerly awaited budget options report – okay, eagerly awaited by some people – and I break down the highlights Hint: When raising income taxes looks like the good option, you know things aren’t going well.

This morning the city’s Independent Budget Office issued its annual Budget Options document, a sprawling list of ways for the city to either save money or raise revenue. In past years, this was the kind of thing that only got policy wonks’ hearts a-flutter; now, with the city staring down the barrel of $5 billion budget deficits, and Congress looking more interested in tax cuts than in riding to local governments’ rescue, some of the ideas in the IBO report may end up becoming reality quicker than you’d think.

The first thing that’s clear: There’s just not all that much to easily cut. While the IBO throws out plenty of ideas for savings – from “eliminate grass clippings from trash collection” to “replace late-night service on the Staten Island Ferry with buses” – most of these would save only a few million dollars, not even enough to pay more than a few hours’ worth of the city’s looming deficits… [read more]

Geared toward small-business owners, but a worthwhile overview of coming legislation for the general public as well. I tackle health care, taxes, and credit cards:

Health care: Still on the critical list

Last year: The cost of providing health insurance to employees continued to skyrocket, jumping by an average of 5.7% per employee after a 6.1% hike in 2007, according to a study by consulting firm Mercer. A survey by the National Federation of Independent Businesses found that health care was the number-one concern of small business owners, prompting the NFIB to become a major backer of an advertising campaign calling on the presidential candidates to make health reform a priority.

This year: President-elect Obama has endorsed a sweeping reform plan that would create a new National Health Insurance Exchange to allow more businesses access to insurance pools…[read more]

The short answer: Only if your business is netting more than a quarter-mil a year. Which pretty much rules out any American businesses this year.

Joe the Plumber must be pleased: President-elect Barack Obama has recently hinted he’ll delay his plan to raise taxes on individuals earning more than $250,000 a year. But what will this reprieve really mean for small business owners – should they prepare for an eventual tax hike?

That depends, say tax experts, on how your business is incorporated, and how much money it makes… [read more]