The Expansion of Power Continues…

May 24th, 2010

By Brian Bagent

The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws.

It is a grave error to suppose that a dictatorship rules a nation by means of strict, rigid laws which are obeyed and enforced with rigorous, military precision. Such a rule would be evil, but almost bearable; men could endure the harshest edicts, provided these edicts were known, specific and stable; it is not the known that breaks men’s spirits, but the unpredictable. A dictatorship has to be capricious; it has to rule by means of the unexpected, the incomprehensible, the wantonly irrational; it has to deal not in death, but in sudden death; a state of chronic uncertainty is what men are psychologically unable to bear.

Both of those quotes are attributed to Ayn Rand and bear memorization.

I have warned, here and elsewhere, for years, that a powerful government is the enemy of all of us.  I am not alone in pointing this out, but it seems we have been ignored.

“But we have to pass the [health care] bill so that you can find out what is in it.”  — Nancy Pelosi (D-CA), Speaker of the House.

Thanks Nancy.  We are starting to find out what is in it.  A provision has been “discovered” that greatly expands the authority of the IRS.  Unsurprisingly, nobody, neither congresscritters nor their staffers, is taking credit for introducing this new power into the health care legislation.

According to CNN, the 1099-misc, which was formerly used to track off-payroll employment, will now be used to track every business transaction that is $600 or more.  If you’re a small business owner and need to fly from Houston to Newark to conduct business, the new law requires you to submit a 1099-misc to Continental airlines for the passage (assuming it’s over $600 for the year).  If you do business with Office Depot or Best Buy and spend more than $600 in a year (buy a single computer and a few peripherals, and you’re there), you must send them a 1099-misc.  If your business advertises with the Yellow Pages, you’ll need to send them a 1099-misc.

It doesn’t take much imagination to see the problems here.  Woe betide the poor slob who forgets to 1099-misc somebody.  Worse yet, woe betide the poor slob who criticizes the government, or some entity that is a friend of the government, and forgets to 1099-misc somebody.  This is a law that will not be enforced with military precision (how can it be), but rather one that will be enforced arbitrarily.

It is expected that this new law will help the federal government raise an additional $300 billion in revenues without having to raise taxes.  I wonder if these geniuses have considered the offset of the cost to businesses of complying with this insanity, how many millions or billions of unproductive capital it is going to cost the private sector.  Have they considered how many millions, or billions, it is going to cost the government itself to comply with this idiocy?  Never mind the cost to state and local governments to comply.

How many small businessmen does anyone suppose are just going to say “the hell with it” and hang it up?

As with everything, this cost of compliance is going to be paid, not by these small and big businesses and government, it is going to be born by everyone who conducts business with them.  And in the case of the government, that is all of us.  Overnight, through some very cynical legislation, everything is going to become more expensive.

Give the IRS their due.  Or else.  Ain’t a big, powerful government grand?


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3 Responses to “The Expansion of Power Continues…”



  1. Dan Miller |

    Even accepting for the sake of argument that the current administration is benign and has the best interests of all of its subjects citizens at heart, without regard to “special interests,” i.e. everybody except thee and me, it was stupid to push the massive Health Control Law through with great haste and fanfare, unread and misunderstood on the basis of political talking points and ideologies not widely shared.

    Gradualism was long the philosophy on which the British Empire thrived; change, but not radical change, brought her stability and a constitutional monarchy. France, on the other hand, adhered steadfastly to her absolutist monarchical system and one of the consequences was the French Revolution where Professor Guilotine’s marvelous devices came into widespread use.

    A series of health law modifications, well thought out and simple enough even for congresscritters and the pundits to understand, would probably have not brought with them the unanticipated and (I hope) unintended consequences — including the declining popularity of the Obama Administration and of congressional incumbents of both parties. Instead, we appear to have got as yet unknowable tax and revenue consequences, unknowable consequences for health care providers and recipients, and a bunch more.

    Here is an article about one physician who seems to have come up with some good ideas for his own medical practice. They are not new ideas, but their application in the medical context these days is certainly novel.

    Of some interest, perhaps, here in Panama, I can go to an English speaking physician, pay about $10 for the visit, and he takes as long as he needs to do what he has to do. Even with local health insurances, the paperwork is minuscule compared to that in the United States. Several years ago, I needed emergency back surgery. The neurosurgeon spent well over an hour discussing the alternatives with me. He decided that an MRI was required, ASAP. He telephoned the general manager of the insurance company at home, since it was by then after office hours. I had the MRI the next morning (total cost $400, my cost $200) and major surgery the next day. When I was about to be discharged from hospital several days later, the general manager met me, explained what I had to pay and what his company would pay, I wrote a check and left. My surgeon, like nearly all physicians here, has his home phone and cell phone numbers on his business card. He told me that should I need him, to call him regardless of the hour. He cared about me, as a patient and as a human being, rather than as a number.

    There are other steps which could have been taken and perhaps might still be. Reasonable state limitations on medical malpractice suits would help. Texas has done it, and the influx of physicians from other states has been impressive — more than fourteen thousand physicians moving or returning to Texas to practice medicine there. The practice of “defensive medicine,” making tests which are not medically indicated but may help to defend against a frivolous claim, has declined. The linked articles notes,

    The Massachusetts Medical Society found that 83% of its doctors practice this sort of defensive medicine. The costs of litigation and defensive medicine are passed on to the patient in the price of health care.

    Incremental and better thought out ideas such as these would, I think, be far superior to the great grab bag of mystery notions embedded in the current Health Control Law.


  2. Tom Carter |

    Points well made, Dan. I’ve also been treated by Panamanian doctors, in the distant past, and had good results. However, my experiences in other parts of the world weren’t so positive. In particular, former Soviet-bloc countries (I’ve lived in five of them and know about others) have evolved kind of a dual-tiered system. There’s the “free” national health service, which delivers sub-par treatment with sometimes long waits, and the system of private clinics, where you pay your way or have to have insurance. Maybe they’ll evolve further, but it isn’t great now.

    Thanks for the info, Brian. This is the first I’ve heard of the 1099-misc requirement buried in the health care bill. The sad thing is, I suspect a lot of members of Congress who voted for the bill are just now hearing about it because they didn’t read the bill. Same for those who opposed it, mostly Republicans — they should have a made a stink about this, but I suspect most of them didn’t read it, either.

    I wonder how many other stink bombs are hidden in those 2,400+ pages?


  3. Brian Bagent |

    I expect a great many in 2400 pages. That’s why the bill had to be passed, don’t you know.


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