Federal government budgets are little more than games designed to deceive. That assessment might seem harsh, but it’s the only reaction possible after reading a Government Accountability Office (GAO) reports that says the IRS is not ready for Obamacare.
GAO auditors found 47 new taxes and regulatory requirements that the IRS will be responsible for and auditors don’t believe that the agency can be ready for all of them in time.
While the entire report is interesting, one of the 47 new rules jumps out as a shell game, where a shell game is defined as shuffling shells around to create confusion.
The specific rule says that corporations with more than $1 billion in assets will need to increase their estimated tax payments in the third quarter of 2014 by 15.75 percent and then lower their payment by 15.75 percent in the next quarter.
Increased corporate tax payments will be due in mid-September, days before the federal fiscal year ends.
This provision shifts money from corporations to the government so the fiscal 2014 government deficit will look lower than it is.
Over the long term, this rule looks like it should have no impact. Unfortunately, this budget sleight of hand is likely to have a pronounced negative impact on the economy.
Larger corporate tax payments required in that quarter will reduce the amount of money available for hiring and investment. This will come when the full expenses of Obamacare are hitting corporations and consumers.
While everyone knows that laws with more than 2,000 pages will have plenty of surprises, few include measures that could trigger a recession.
More Posts by Michael Carr
© 2016 Newsmax Finance. All rights reserved.