or we could otherwise title this post: Does anyone in Congress own a calculator, and do they know how to use it?

The new law requiring businesses to issue a 1099 to everyone that they pay more than $600 a year to is expected to involve 40 million businesses. Each business will see the number of 1099s that they issue increase by about 200 per year each. That is an expected 8 billion 1099 forms. This measure is expected to bring in an extra $2 billion in tax revenues- or about 25 cents per extra form. The problem here is that, assuming it takes IRS employees 1 minute to cross reference and check each form and the math it causes, it will take over 64,000 man-years to review the forms. This will cause the IRS to hire that many new employees, and at $40K per year, will cost the government $2.6 billion to enforce, a net loss of $600 million a year.

This measure is not designed to bring more money into government coffers. If you read closely, payments made by credit card are exempt from the reporting requirement. This measure is probably designed to bring more money into the banks, who collect a 2% transaction fee for each credit card  payment, by forcing businesses to use credit cards.

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