By Denny DeWitt and Dan Danner
February 26, 2013
Beginning in 2014, millions of small businesses are set to take yet another broadside from the billions in new health-insurance taxes (HIT) included in the president’s health-care law, the Patient Protection and Affordable Care Act. The law calls this a “health insurance fee,” but the ugly truth is unavoidable: the estimated $100 billion in costs will ultimately fall on Main Street enterprises and the self-employed. And despite all the political rhetoric in Washington about ”shared sacrifice,” the nation’s largest companies and labor unions are not subject to the tax.
This is truly a tax on small business.
Helpfully, policymakers are working to create a small-business fix to ensure our nation’s greatest source of job creation and their employees aren’t saddled with crippling new taxes that would make offering health insurance benefits too costly to provide for Alaska workers and families.
The Jobs and Premium Protection Act, bipartisan legislation recently introduced by U.S. Representatives Charles Boustany (R-LA) and Jim Matheson (D-UT), would establish a needed fix for small enterprises and their workers by repealing the HIT tax before it can be implemented and before the economic and human impacts become real and painful for millions of families throughout the country.
Recent polls by Gallup have shown that the two greatest challenges faced by small businesses are higher health-care costs and increased taxes. The small business HIT combines both of these challenges into a single and unaffordable threat to their operations and the well-being of their employees. Congress would be wise not to have a memory loss on this and other challenges, as we continue to face significant economic hurdles and work to place us back on a path to job growth and economic recovery.
Repealing the small business HIT would be a good start.
According to current Congressional Budget Office (CBO) projections, the costs of the HIT will almost entirely be passed along to small businesses, their employees and the self-ensured. To place the issue in context, a recent study (pdf) by the former director of the Congressional Budget Office, Douglas Holtz-Eakin, found that, on average, the HIT will cost each family about $5,000 in higher premiums over a decade.
Congress can and should follow the bipartisan leadership of Representatives Boustany and Matheson to fix the HIT on small business. Prior to its passage, warnings about the cost and impact of the president’s health-care bill were well known. It was a classic case of the means justifying the end goal.
Unfortunately, the end political goal of the law is now set to come at the expense of our local small businesses and the millions of workers they employ, and the quality of health care made available to them and their families. Those affected are not zeros and ones on a spreadsheet in front of bureaucrats in Washington, they are our friends and neighbors who operate and work at small enterprises in the communities we call home.
These small businesses and workers are not asking for special treatment or a handout. They simply want to have the federal government allow them to do what they do best: employ local workers, grow their businesses and contribute to the economic and social well-being of their respective communities. To this end, we commend Representatives Boustany and Matheson on their effort to repeal of this punitive tax.
About: Denny DeWitt and Dan Danner are respectively the Alaska State Director and the CEO of the National Federation of Independent Business (NFIB).
Note: Last Friday in Anchorage, small-business owners gathered to discuss the HIT tax. More about that can be found here. http://www.nfib.com/alaska/nfib-in-my-state-content?cmsid=62034
Received February 22, 2013 - Published February 26, 2013
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