There was a provision that was to take effect on January 1st, 2012 on the IRS tax form1099 that would have all businesses report purchases from their suppliers that were greater than $600 a year which would have been a nightmare for small businesses. Before this scheduled provision, businesses only had to report anything that related to consultations and freelance work on the IRS tax form 1099. The reason for the provision was to try and meet a rising government deficit that was brought on by the costly Healthcare program that passed last year. The Senate voted on April 5, 2011 to pass the reversal of that provision.
Small businesses voiced their resented opinion stating that it was unfair and insensitive to them prior to the reversal. They felt used just to help meet the costs of healthcare and that an alternative plan needed to be found to raise the funds that were required. Senators agreed along with Representatives that the provision was unfair and would ultimately hurt small businesses that were major contributors to the economy.
However, there was still conflicting feelings on how to regain the loss of revenue that was expected from the IRS tax form 1099. A new bill that was passed seem to provide a partial solution by suggesting a plan where individuals that had an income of over 400% above poverty would give back their healthcare allowances to the government. Some felt that this was taking advantage of the middle class, especially for those that received bonuses.
Because of the costly Obama Healthcare program, the approaching crisis of social welfare and the rise in fuel costs that is anticipated to occur when “baby boomers” are up for retirement is going to make the expected deficit even worse. We, the people are waiting anxiously to see just how the Obama administration is going to resolve these issues to avid an even deeper financial crisis. In the meantime, the government continues to look for different ways to battle this growing deficit.