Pity the poor entrepreneur and small business owner in America now getting socked, with the mother of all taxes, by a government that has become either hostile, or indifferent, to understanding what it takes to build a business, grow a company and hire more workers. I'm not talking about new fees, but about a much greater confiscatory tax, imposed without any real debate or consideration--the confiscation of time.
Nearly every Obama administration initiative demands new, more complicated reporting and compliance filings on small businesses and entrepreneurs that are already overburdened with a mish-mash of reporting requirements that suck away an entrepreneur's time and energy. 2008 compliance costs for a small business, according to a recent SBA Report, was approximately $10,000 per employee. But, the Obama Administration has added new, and far more onerous, reporting demands that are likely to treble those costs to $30,000 per employee. Facing such huge, and hidden, costs of compliance, is there any wonder small businesses are not hiring as they have in the past?
Consider, for example, one of the new reporting requirements contained in Section 9006 of the disastrous Obama healthcare bill which requires all small companies to file 1099s for any purchase over $600, to include anything from office supplies to electricity to independent contractors. As a result, small businesses may need to hire a full-time compliance officer that does nothing but file these new forms and reports.
But that is just the start. For example, Section 1512 of the Recovery Act (ARRA) requires that a report with a minimum of 12 data points be submitted quarterly for each Recovery Act project over $25,000. A separate report has to be submitted if the business worked as a subcontractor on any ARRA project. This report is separate from and in addition to the mandatory, contractual reports submitted monthly to the government contracting officer on each project and, separate from and in addition to, the quarterly program reviews provided for agency leaders. Of course, if the business performs ARRA work at the State level, many of those states have additional reporting requirements for businesses who are working on federally funded stimulus projects within the state.
Small business already struggles because the federal government’s reporting requirements are a moving target. Businesses must track the unusually frequent changes in government-issued guidance regarding reporting requirements. For example, since issuing the first reporting requirements for ARRA in February 2009, these requirements have changed nine times in the past 19 months, in March 2009, April 2009, June 2009, September 2009, November 2009, December 2009, April 2010, May 2010 and most recently in September 2010.
Each “update” to the reporting requirements issued by OMB is followed by an ancillary memo issued within each federal agency by each agency’s Chief Acquisition Officer.
Businesses, especially small businesses, may spend large segments of the workday tracking reporting requirement changes. Businesses must do this because a clerical error, which could be interpreted by the oversight community as fraud, carries severe penalties, and the burden of proof of innocence falls on the business.
Taxes take many forms. More damaging, than canceling the Bush tax cuts, more damaging than the changing definition of who is considered “rich”, more disturbing than Obama Administration's complete lack of understand of what it takes to grow a business and an economy, is the fact that time is money, so the new, burdensome and intrusive reporting requirements demanded by Obama's flawed policies puts a tax burden of time on all businesses.
Under the guise of “accountability” and the lure of “transparency”, the Obama Administration continues to bombard businesses with additional, ill-thought reporting requirements. Few legislators and few members of the Obama Administration have ever experienced first-hand, the struggles of entrepreneurship--what Jerry McGuire calls "an up-at-dawn, pride-swallowing siege," of trying to win a customer's business, be competitive and succeed. The Administration, clearly, does not understand or does not care about the true cost to business of their self-serving actions.
Peter Drucker, the management guru once said: “if you’re meeting, you’re not working”. Perhaps the corollary is that when a business is “reporting”, then they aren’t really working either.
Make no mistake: well-reasoned reports aid in accountability and transparency and are essential to ensure that taxpayer dollars are spent wisely by the government. But this is not happening in the Obama Administration. The President Obama once promised he would not raise taxes on the middle class. Yet, fees, fines and mandatory purchases are “onerous, rigorous demands” which, according to Webster, qualify as taxes.
Obama has demanded the one commodity which is in limited supply, and which can never be reproduced once spent—time. Obama wastes our time--and that tax is the greatest of all.