The Long Cold Winter

geekster · Post by **geekster** » Thu Jul 22, 2010 7:01 pm

If you are self-employed, have a work truck, and buy more than $600 worth of gas at the local gas station for it, you will have to send a 1099 to the gas station (and a copy to the IRS).

Got a cell phone you use for business that incurs more than $600 in charges per year, yup, need one to the cell phone company, too.

Do you cross the Bay Bridge in that work truck and pay more than $600 a year in tolls? The bridge authority gets one, too. Parking fees in excess of $600 per year? Another 1099.

Uniform services for more than $600 a year? Yup, another 1099.

It is just fucking *insane*.

But it is probably OK if you are an illegal alien operating a landscaping business "under the table" or dealing dope or sitting on your ass collecting unemployment for TWO FUCKING YEARS.

I swear you can make a good dollar right now in the pitchfork and torch business. Maybe offering tar and feathers, too, as long as you don't buy more than $600 worth of supplies.

The PR agency blew the slogan. It was supposed to be "Change You Can Not Fucking Believe!".

Ugly Dougly · Post by **Ugly Dougly** » Fri Jul 23, 2010 9:43 am

Geekster, is this all so you can get a tax write-off?

geekster · Post by **geekster** » Fri Jul 23, 2010 1:37 pm

Lets say you are in business. Say you are a sole proprietor. Lets also say you perform some kind of work for someone. Say you put a roof on someone's house and charge them $1000 for it. (just picking round numbers here for the purpose of illustration)

So with a sole proprietor, there is no difference between business income and personal income. You must show $1000 income. But you didn't make that much because you also had to buy shingles, nails, other supplies, and maybe had to pay a helper.

So at the end of the year the way it has always worked is you save all your receipts for stuff you buy. Then you tally up all the income you had from various jobs you did, subtract your cost of materials, depreciation on your equipment, etc. and the difference was how much you cleared and pay tax on. No big deal. Now it is different in that you have to go through the receipts twice. Now after you are all done with the normal stuff you did, you have to go back through and sort them out by supplier.

Any supplier or anyone who rendered you a service (office rental, cell phone rental, tool rental, whatever) that comes to more than $600 for the year, you must now fill out a form 1099 for each one, submit one copy to the IRS and one copy to the supplier. Its just more paperwork.

Apparently the government believes that people are underreporting their income. So now the IRS will get 10,000 for 1099's from everyone who bought more than $600 worth of stuff from, say, Fred's Lumber. The IRS computer is going to add all of those up and the amount of gross sales reported by Fred's Lumber better be higher than the sum of all the 1099's.

It is going to greatly increase the complexity for a small operator to track their expenses and tally them at the end of the year. Maybe the government is hoping people will lose them or something and end up paying more in tax. I really can't figure out WHAT the purpose is because the IRS is going to be absolutely deluged with for 1099's and so will large companies that deal with small operators like Home Depot, NAPA auto parts, even things like beauty and barber shop suppliers are going to be swamped with these if they are a national chain.

It is going to cause an absolute blizzard of paperwork. Is it the USPS protection act? Is it the "we gotta hire 1000 more IRS agents to go through these forms" act? No idea. But I can't see how the benefit is going to outweigh the cost. It is likely to drive more small operators out of business as they throw up their hands in frustration at all the government paperwork.

geekster · Post by **geekster** » Fri Jul 23, 2010 2:59 pm

Ok, I think I found the reason for it. It looks like it is a precursor to a VAT. For example, if you buy shingles for $100 and sell them to the customer for $1000 installed, that is a $900 "value add". Before they can begin collecting a VAT, they must have some way of tracking things through the system.

Unlike a sales tax, a VAT is paid at every step of the production cycle. So the company that makes the shingles buys raw materials and sells shingles at a profit. The distributor would pay a sales tax (VAT) on that difference. Then the distributor marks them up a bit when they are delivered to the retailer. More tax. Then the retailer marks them up before selling them to the end user or contractor, more tax.

But in order to know how much tax is due at each step, it must know how much each entity in the chain paid for them.

Trishntek · Post by **Trishntek** » Fri Jul 23, 2010 4:43 pm

If I understand it correctly, it begins January 1, 2012.

geekster · Post by **geekster** » Fri Jul 23, 2010 6:25 pm

Yeah, this Congress has engineered a lot of things to smack us in 2012. The expiration of that tax cuts, for example that are due to expire on Jan 1 2011. You won't see the impact of that until you file in 2012. The lowest tax rate is set to jump significantly. The Democrats are going to attempt to blame the Republican House that will probably come in this coming January. There aren't enough Dem Senate seats up for election this cycle to produce a filibuster-proof majority in the Senate so the Dems will be able to block attempts to roll this back.

Trishntek · Post by **Trishntek** » Sat Jul 24, 2010 8:27 am

Maybe we should just plan on staying on the playa indefinitely after the burn in 2012. It just might be the safest place to be!

geekster · Post by **geekster** » Sat Jul 24, 2010 10:31 am

I just wish there was a political party more closely aligned with my own views. I don't really feel completely comfortable with either of the major ones. The Democrats scare me the most at the moment because they seem to have absolutely no respect for the taxpayer and want to turn the entire budget into nothing but various entitlement programs.

The Republicans are scary in places like Kansas where they mandate intelligent design in the schools but that scares me less as that is local politics. I pretty much favor the notion of a state or county or town being free to reflect their values in their laws. I can always move. You won't find me taking a job in Kansas. The problem with the Democrats is there is nowhere to flee from a federal government run amok.

Belize is looking better every year.

We just hired a whole mess of people in Estonia at work. Something like 60 of them. Why Estonia? "Labor costs comparable with China and the people have the skill set we need with less of a language/culture barrier and no 'Great Firewall' to worry about" is the answer I got.

I felt I should have said something like "we could cut costs greatly here if we just moved the office 200 miles East to Carson City" but I held my tongue as it wasn't really related. The thing is that we are growing, we have more work than we can handle, and US taxes and laws are causing us to go halfway around the world to hire help while the unemployment rate in the county where our current office is located is 11.4%.

This is an example of increases in taxes and regulations causing a reduction in revenue for the local government. Just like in MA when they increased taxes on boats, John Kerry moves his yacht to Rhode Island. Instead of getting a larger percentage of something, MA gets 100% of nothing and a boat yard in Rhode Island now gets a nice income from having another yacht in their yard.

It is now cheaper for us to set up an office from scratch and hire 60 people in Estonia than it is to simply expand an existing office here in the US. That is your government at work. We have the highest combined state and federal corporate income tax in the world. We have one of the highest capital gains tax rates in the world. China's capital gains rate is 0%. You don't pay tax on capital gains. You invest $1000 in something that grows to $2000, the extra $1000 is yours to reinvest or spend. It's no wonder US companies set up a separate Chinese subsidiary for doing business there. If you try to do it from your primary entity, Pelosi will tax you to death.

Estonia became one of the first countries in the world to adopt a flat tax, with a uniform rate of 26% regardless of personal income. In January 2005 the personal income tax rate was reduced to 24%. A subsequent reduction to 23% followed in January 2006. In 2007 the tax rate was lowered to 22% and in 2008 to 21%. The rate was frozen in 2009. Estonia received more foreign investment per capita in the second half of the 1990s than any other country in Central and Eastern Europe

And it looks like their tax policies are paying off in spades.

Theres Always One · Post by **Theres Always One** » Sat Jul 24, 2010 2:30 pm

geekster wrote:If you are self-employed, have a work truck, and buy more than $600 worth of gas at the local gas station for it, you will have to send a 1099 to the gas station (and a copy to the IRS).

Got a cell phone you use for business that incurs more than $600 in charges per year, yup, need one to the cell phone company, too.

Do you cross the Bay Bridge in that work truck and pay more than $600 a year in tolls? The bridge authority gets one, too. Parking fees in excess of $600 per year? Another 1099.

Uniform services for more than $600 a year? Yup, another 1099.

It is just fucking *insane*.

But it is probably OK if you are an illegal alien operating a landscaping business "under the table" or dealing dope or sitting on your ass collecting unemployment for TWO FUCKING YEARS.

I swear you can make a good dollar right now in the pitchfork and torch business. Maybe offering tar and feathers, too, as long as you don't buy more than $600 worth of supplies.

The PR agency blew the slogan. It was supposed to be "Change You Can Not Fucking Believe!".

Collecting unemployment for 2 years? I'm not quite sure you know how unemployment works. If anyone is able to collect for 2 years it is because they were making about $700/month and are already at poverty level anyays. In which case their total take of unemployment for that two period is the same as the person who exhausts it at the maximum rate in 8 months. Everyone gets the same fixed amount of unemployment. The rate at which it is paid out to you is dependent on how much you were making previously.

Theres Always One · Post by **Theres Always One** » Sat Jul 24, 2010 2:39 pm

geekster wrote:I just wish there was a political party more closely aligned with my own views. I don't really feel completely comfortable with either of the major ones. The Democrats scare me the most at the moment because they seem to have absolutely no respect for the taxpayer and want to turn the entire budget into nothing but various entitlement programs.

The Republicans are scary in places like Kansas where they mandate intelligent design in the schools but that scares me less as that is local politics. I pretty much favor the notion of a state or county or town being free to reflect their values in their laws. I can always move. You won't find me taking a job in Kansas. The problem with the Democrats is there is nowhere to flee from a federal government run amok.

Belize is looking better every year.

We just hired a whole mess of people in Estonia at work. Something like 60 of them. Why Estonia? "Labor costs comparable with China and the people have the skill set we need with less of a language/culture barrier and no 'Great Firewall' to worry about" is the answer I got.

I felt I should have said something like "we could cut costs greatly here if we just moved the office 200 miles East to Carson City" but I held my tongue as it wasn't really related. The thing is that we are growing, we have more work than we can handle, and US taxes and laws are causing us to go halfway around the world to hire help while the unemployment rate in the county where our current office is located is 11.4%.

This is an example of increases in taxes and regulations causing a reduction in revenue for the local government. Just like in MA when they increased taxes on boats, John Kerry moves his yacht to Rhode Island. Instead of getting a larger percentage of something, MA gets 100% of nothing and a boat yard in Rhode Island now gets a nice income from having another yacht in their yard.

It is now cheaper for us to set up an office from scratch and hire 60 people in Estonia than it is to simply expand an existing office here in the US. That is your government at work. We have the highest combined state and federal corporate income tax in the world. We have one of the highest capital gains tax rates in the world. China's capital gains rate is 0%. You don't pay tax on capital gains. You invest $1000 in something that grows to $2000, the extra $1000 is yours to reinvest or spend. It's no wonder US companies set up a separate Chinese subsidiary for doing business there. If you try to do it from your primary entity, Pelosi will tax you to death.

Estonia became one of the first countries in the world to adopt a flat tax, with a uniform rate of 26% regardless of personal income. In January 2005 the personal income tax rate was reduced to 24%. A subsequent reduction to 23% followed in January 2006. In 2007 the tax rate was lowered to 22% and in 2008 to 21%. The rate was frozen in 2009. Estonia received more foreign investment per capita in the second half of the 1990s than any other country in Central and Eastern Europe
And it looks like their tax policies are paying off in spades.

I disagree. It is not 100% the problems of the municpalities and governments taxing businesses that causes these problems. Everyone is looking to save a buck but we do need taxes to pay for certain public goods that nobody else will pay for.

I know the real world doesn't work this way but I feel that businesses have a moral duty to their local and national economies. To suck it up and stick around (even though you can't because the taxes and such would make you noncompetitive and probably put you out of business). But we can't just elimate taxes all together because it creates a "race to the bottom" with everyone trying to undercut each other and we are left with a trashed environment, oppressive labor laws, and inhuman working conditions (like in most countries where our products are made).

So there has to be a middle ground. But in this global world of ours that will never happen, sadly, as there will always be someone out there
willing to do it for just a little less.

happy 4000 posts btw!

geekster · Post by **geekster** » Sat Jul 24, 2010 3:19 pm

but we do need taxes to pay for certain public goods that nobody else will pay for.

I think most people understand that. The problem comes in when the government decides that it is their job to "take care of" the people. That is not the role of government and is directly against the founding principles of this country.

It is your job to take care of yourself. Current political entities attempt to justify this with envy politics. They want you to hate someone who has more of something than you do. And rather than giving you the tools to earn that whatever it is yourself, they offer to play Robin Hood and take stuff from them to give to you.

"When the people find they can vote themselves money,
that will herald the end of the republic."

-- Benjamin Franklin

But in this global world of ours that will never happen, sadly, as there will always be someone out there
willing to do it for just a little less.

As it should be. The problem is when a government loads up overhead. US labor is nearly priced itself completely out of the market. Unless something is manufactured by machine, you can forget about it being made in the US. Even then, the costs associated with doing business in the US can be astronomical. It can take a decade to get approval to build a plant. Or, at the opposite end of the spectrum, you have a city that will fast-track a plant and then back load the deal by sticking it to the company once the sweetheart period expires and then the company promptly shuts down the plant. Then some activist judge someplace says the company must keep the plant open even though it is a guaranteed money loser. That company then either goes broke or does the absolute minimum required until it is finally able to extract itself from that market.

To use China as a recent example, it is no longer cheaper for a company to locate there. Pretty much everyone that can be pulled away for inexpensive wages has been pulled. Wage inflation is going on at a furious pace there.

can't sit still · Post by **can't sit still** » Sun Jul 25, 2010 1:06 pm

Hey!! Don't be so negative. I like "titty licking"

The fucktards want to keep track of every penny that is spent.

geekster · Post by **geekster** » Sun Jul 25, 2010 1:22 pm

Yeah, as if it is THEIR money that we are spending. It is really none of their business. It is bad enough having to report it at all but to have to do their secretarial work for them is even worse. I would have less of a problem if we just had to submit copies of the receipts and let them figure it out by supplier. What they are doing is pushing all that administrative work down onto the small business owner because THEY want more information. Just give them the raw data (the receipts) and let them sort them out any way they want.

can't sit still · Post by **can't sit still** » Sun Jul 25, 2010 1:38 pm

That note in your hand is the property of the federal reserve. You're just paying interest to use it.
Jim Willies has some interesting ideas;
"Talk will be about nothing fixed by the financial syndicate in power. Let's hope by then, the Interpol arrest warrants for many US & UK bankers and some EU bankers are delivered. The warrants already exist and await timing to be served, seen by a friend of a contact. The Jackass proposes the arrest warrants be served at the next Davos Economic Summit."

http://news.goldseek.com/GoldenJackass/1279742400.php

geekster · Post by **geekster** » Sun Jul 25, 2010 3:03 pm

http://www.spiegel.de/international/bus ... 21,00.html

With expensive accounting rules, an increased threat of litigation and hundreds of millions of dollars in fines for some firms, the once prestigious New York Stock Exchange and other American markets have become unattractive to Germany's biggest companies. Daimler and Deutsche Telekom have fled this year and the few remaining are likely to follow.

This also follows a trend of more American companies deciding to IPO on the London stock exchange rather than in the US. The reason is Sarbanes/Oxley (SOx) regulations. They make it impossible, for example, to show any cash on your books even though you might have plenty of cash. SOx requires you to imagine an impossibly bad scenario each quarter. You have to imagine that ALL employees will cash in ALL vacation balances and exercise ALL stock options every quarter. So if you have $10 million cash in the bank but your employees have more than $10 million in accrued vacation and stock options, you must carry a negative cash balance. You have to pretend all of that will be cashed in, in full, in each quarter. It is fantasy land accounting and as a result, companies are fleeing US exchanges and headed to places where Generally Accepted Accounting Procedures are the rule.

Yet another example of your government "protecting" you to death.

can't sit still · Post by **can't sit still** » Mon Jul 26, 2010 4:38 pm

This is a long, interesting paper. In essence, the Western financial system is controlled by Anglo banking interests. They're doing everything that they can to maintain the system and the control. The rest of the world wants out.
Their efforts seem to center on a "Nordic Euro" The Southern euro will be for the PIIGS and Ireland. The Nordic Euro would be a "dollar killer" in that it would offer stability from tangible backing. Business can't make a profit if there is TOO much volatility in a currency.

The IMF has little time to counter this move. The IMF's SDRs are all new crap based on old crap [fiat] The G8 is falling in importance as they fall in solvency. The G20 has an increasingly larger share of the world GDP.
The Anglo banking empire would like to stay in control. But, as their currencies become more worthless, COMMERCE will shun these currencies because of volatility.
If / when the dollar trades at it's actual value, the U.S. economy won't be able to support all the parasites.
http://www.marketoracle.co.uk/Article20560.html

can't sit still · Post by **can't sit still** » Tue Jul 27, 2010 7:34 am

Here's some info on what's expected of the Dow;
http://www.gata.org/files/LongwaveGroup ... 9-2010.pdf

Ugly Dougly · Post by **Ugly Dougly** » Tue Jul 27, 2010 10:58 am

It's ironic that so many people go into business for themselves, only to find they have to be their own financial and legal department. I'm not that good at math.

geekster · Post by **geekster** » Tue Jul 27, 2010 3:54 pm

What really sucks is when you go into business for yourself as an individual craftsman or other skillset like maybe a carpenter or a mechanic or a hairdresser (most hairdressers and barbers at shops are self employed) and have it fairly much under control and then the government completely changes all the regulations on you.

Or when the government creates some kind of a plan, like for example a health savings plan where you can contribute in pre-tax dollars. Then after 10 years once you have some serious money in there, they change the rules. So then they say ... oh, we are cutting out about half the things you can use the money in that plan for and if you want to take your own money out of it, you not only have to pay the tax on it (I am fine with that) but we are going to impose a 20% penalty (I am NOT fine with that) to get your own money out. So they cut what you can use it for and at the same time double the penalty for getting your own money back from 10% to 20%.

The bottom line is that you can't trust the government. They make a set of rules, get people to do something, then they change the rules and sock it to the people who took advantage of it. The lesson it teaches is "the government is not your friend".

Congress over the past year has been debating confiscating 401K and IRA retirement plans and converting them all to government debt securities. I would imagine that would piss some people off enough to burn down the Capitol building.

You just can't trust them. And it is the damned Democrats who do it.

can't sit still · Post by **can't sit still** » Tue Jul 27, 2010 6:11 pm

" I would imagine that would piss some people off enough to burn down the Capitol building. "
THAT is what is missing. Maybe it's the fluoride, after all. We've really become docile at accepting whatever is tossed our way. GOV refers to SS as an "entitlement" like it's some fucking gift we earn from them if we're good boys and girls.

I never, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, ever, did trust GOV.
So, I put my faith in my own abilities and my savings in a place where only I would have access. It's better to have a small savings that you can protect than to have massive investments that can blow away in the wind.
In 1921, America started to go into a bad recession. GOV cut it's expenditures in half and the problem ended. Then along came the shithead Keynes and said that GOV could spend it's way out of a recession.
The symbiosis ended long ago. Now, it's pure parasitism with an offhand justification of social welfare. That facade is falling away now.

China has an economy about the same size as California. China has moved 350 million peasants to the city and improved their lives by many standards. China has $ 2.6 trillion in foreign reserves,,, all with an economy the size of Ca. The Chinese GOV has an 82% approval rating.
Since democracy is creeping socialism and socialism never works.,,, WTF does it matter if you live in a communist country if GOV has an *82 % approval rating. Compare the size of our economy to the size of China's economy. We're going down the shitter because of our business model AND our political system.

The system envisioned by our founding fathers did NOT include universal suffrage. It did not include fiat money. We've morphed into a piece-of-shit business model. Big Bad Bald Ben Bernanke came out and said recovery is years off. How very astute if him. No jobs,,, no recovery. Bad business model,,, no jobs.

geekster · Post by **geekster** » Wed Jul 28, 2010 7:28 am

Under a little-noticed provision of the recently passed financial-reform legislation, the Securities and Exchange Commission
no longer has to comply with virtually all requests for information releases from the public, including those filed under the Freedom of Information Act.

The law, signed last week by President Obama, exempts the SEC from disclosing records or information derived from "surveillance, risk assessments, or other regulatory and oversight activities." Given that the SEC is a regulatory body, the provision covers almost every action by the agency, lawyers say. Congress and federal agencies can request information, but the public cannot.

ygmir · Post by **ygmir** » Wed Jul 28, 2010 7:37 am

wasn't there some sort of "most transparent, open administration ever" statement given at some point?

geekster · Post by **geekster** » Wed Jul 28, 2010 8:57 am

In order to understand "progressive" rhetoric, one must first read Orwell who wrote a book or two on the subject. Reading Rand might not be a bad idea either.

Lord help us if they ever pass a "bank account protection act".

Trishntek · Post by **Trishntek** » Wed Jul 28, 2010 10:07 am

Lord help us if they ever pass a "bank account protection act".

SHHHHHHHHHHHHHHH! Don't give 'em any ideas!

ygmir · Post by **ygmir** » Wed Jul 28, 2010 11:51 am

Trishntek wrote:
Lord help us if they ever pass a "bank account protection act".
SHHHHHHHHHHHHHHH! Don't give 'em any ideas!

ha, like they've not thought of that.......they do have the Marx/Lennin playbook to work from.

can't sit still · Post by **can't sit still** » Wed Jul 28, 2010 4:15 pm

ygmir wrote:wasn't there some sort of "most transparent, open administration ever" statement given at some point?

ygmir, YOU WANT TRANSPARENCY ??? !!!! YOU CAN'T HANDLE TRANSPARENCY !!!
Just wait til you have to file a 1099s form for every piece of stone that you touch. YOU will have plenty of transparency. GOV will be able to see right through you to every asset that you have.

can't sit still · Post by **can't sit still** » Wed Jul 28, 2010 4:49 pm

Martin Weiss always has good info and insights;
"When you add these long-term discouraged workers back into the jobless count, you find that the real unemployment rate in the U.S. is actually 21.6 percent! "

"FACT: The enormous magnitude of the governmentâ€™s intervention FAR surpasses anything ever witnessed in the history of humankind.

FACT: Itâ€™s not working! Housing is still collapsed. Long-term unemployment is the worst ever recorded. And the recovery, already anemic, is aborting prematurely."

http://www.moneyandmarkets.com/four-sho ... week-39735

Kunstler always has a way with words;
"We've generated too many future claims on wealth that does not exist and has poor prospects of ever being generated. "
A big part of the problem is that we pulled future earnings to,,, today. Always a bad plan. After WW II, mortgages were only for about 5 years.

"The fatal trouble began when we attempted to compensate for this loss of value-creation by ramping up the financial sector to a credit orgy so that every individual and every enterprise and every government could enjoy ever-increasing levels of wealth in a system that no longer really produced wealth."

http://kunstler.com/blog/2010/07/what-is-it.html

Trishntek · Post by **Trishntek** » Wed Jul 28, 2010 9:32 pm

I totally appreciate all of your analyses and reporting. But I hope you do understand that the "fundamental transformation" of the USA is in full swing.

The SEC was just declared immune from the Freedom of Information Act.

http://www.foxbusiness.com/markets/2010 ... isclosure/

And now the undermining of the Electoral College will make us just like Canada. It won't matter what Iowa, Ohio or New Hampshire votes. New York, Florida, Texas and California will vote and the rest can just stay home.

http://www.csmonitor.com/Commentary/Edi ... pular-vote

Say goodbye to the republic. Social Democracy here we come! What's yours is ours and what's ours is theirs! Now, isn't that special?

geekster · Post by **geekster** » Wed Jul 28, 2010 9:40 pm

Oh, I think this November is going to surprise some people provided the Democrats don't load the ballot boxes with the dead, the illegals, and otherwise ineligible votes.

can't sit still · Post by **can't sit still** » Wed Jul 28, 2010 9:47 pm

Trish "WE" are a collapsing fascist corporatocracy. Maybe when we're flat, fucking broke, they will leave us alone

We no longer do "wealth creation" Much of the rest of the world is raising interest rates. The hot money may just pack up and leave. All burners can move in with ygmir and ignore the ROW.