Posts Tagged ‘small business’
Health Care News
12 Days of Obamacare Surprises: Small Business Tax Credit
Photo: Mike Kemp/Tetra Images/Newscom
Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 11 days, Heritage is going to highlight one of the various changes in Obamacare projections (i.e. cost, enrollment, etc.) from when the law first passed until now.
The Small Employer Health Insurance Tax Credit was intended to encourage employers to offer health insurance to their employees by partially offsetting the cost.
In 2010, the Congressional Budget Office (CBO) estimated that the Small Employer Tax Credit would cost the federal government $37 billion over 10 years.
In 2012, the CBO updated its estimate, projecting the credit would cost $23 billion over 10 years.
Read the rest on The Foundry…
Tags: CBO, higher costs, ObamaCare, small business, surprises, tax credit
Health Care News
Guest Blogger: Rep. Hal Rogers (R-KY) on Empowering Small Business
Small business is the backbone of our economy. They create new jobs, employ half of the private sector workforce, and represent 99.9% of the businesses in this country. In recent years, small businesses have created 7 out of every 10 private sector jobs. In tough economic times, the government should do everything in its power to help small businesses, not burden them with new regulations and higher taxes. In order to jumpstart this economy, we must empower small businesses and give them the resources they need to create jobs and help put America back to work again.
First, we need to make things easy for small businesses. Right now they are drowning in mindless paperwork required by the government for some unknown purpose. And, unfortunately, it’s only getting worse. Take for instance the new health care law. It imposes $569 billion in new and higher taxes on businesses and individuals and includes a provision that would require a small business to file a 1099 form for any purchase over $600. This new government mandate has nothing to do with health coverage, it only imposes yet another hurdle and pile of paperwork for already over-regulated small business owners. A better alternative to the new health care law would be to empower our small businesses to band together to purchase health insurance for their employees so that they have more choices and access to more affordable options. (more…)
Tags: 1099 form requirements, Rep. Hal Rogers, small business, tax burden
Heritage Research
Massachusetts Health Care Reform Has Left Small Business Behind: A Warning to the States
Implementation of the Massachusetts health care reform has largely failed to address the needs of small businesses and their employees. As other states take up health care reform under the implementation deadlines of President Barack Obama’s health care law, they would be wise to implement health reforms that best address the needs of their states, including their small business communities. States should eliminate counterproductive health care mandates and promote market choice and competition, which will help to control the cost of providing coverage for the employer and help to provide affordable, quality coverage for employees. To read more, click here.
Tags: employer mandates, Massachusetts, small business, state health reform
Heritage Research
Health Care Bill’s 1099 Reporting Burdens Businesses
One the most troubling policies in the Patient Protection and Affordable Care Act is a new requirement that businesses report more information on their activities to the Internal Revenue Service. This new requirement will force businesses to divert scarce resources to complying with additional bureaucratic red tape that they could better use creating new jobs. To learn more, click here.
Tags: 1099 forms, ObamaCare, small business
Health Care News
VIDEO: Small Business Owners Fight Obamacare in Court
Research on the last seven recessions shows that small businesses generate about two out of every three new jobs during the recovery. But this time around the Obama administration has crippled the ability small businesses to lead the way in new hiring with their job killing Obamacare legislation.
Not only does the bill slap small businesses with an employment tax, new tax reporting requirements, and tons of new regulations, but it is also an unconstitutional extension of federal government power. (more…)
Tags: individual mandates, National Federation of Independent, ObamaCare, small business
Heritage Research
Obamacare: Impact on Businesses
The new health care law will impose constraints on small businesses across America, dramatically affecting companies’ costs, firm-level allocation of labor, desire to offer health coverage, and motivation to grow, both in terms of income and employment. To learn more about the effects of Obamacare on small businesses, click here.
Tags: economy, employer-based insurance, health care reform, jobs, ObamaCare, small business
Heritage Research
The House Health Care Bill: Sticking it to Small Business
While the nation’s unemployment rate continues to linger around 10%, Congress will soon return to Washington to devise a way to get a health care bill passed by both the House and Senate. As the negotiations loom, a recent paper by Heritage’s John Ligon explores the devastating effects that the employer mandate in the House health care bill would have for small business.
In order to pressure more businesses into providing health care for their employees, the House bill includes an incremental payroll tax on employers that fail to do so. This tax starts at 2% for employers with total annual payroll of $500,000 and increases to 8% on total annual payroll of $750,000 or more. This tax would affect all employers, even those with 25 employees or fewer, since it is based on total payroll, not number of employees.
This tax will add significantly to small business expenditures, regardless of whether they choose to offer health benefits to their employees or not. According to the bill, if employers do offer benefits, they cannot come out of employee’s wages, and they must meet the federal requirements concerning covered benefits. If they choose not to add health care to their expenses, small businesses will instead pay the tax.
However, the structure of the tax causes it to go further than acting simply as an incentive to offer health benefits to employees. Ligon writes: “the employer mandate structure in the House-passed health care bill would create a strong disincentive for a business to expand compensation or even acquire new workers.” This is because, as a business nears a higher payroll bracket, it also risks spending a much higher percentage of its earnings to pay the penalty tax. For example, an employer with total payroll of $499,999 would have paying a $10,000 penalty if it increased its payroll just one dollar. Undoubtedly, this would cause any small business owner to reconsider before offering bonuses or wage increases to its workers.
In the Senate bill, employers with 25 workers or fewer are exempt from paying a penalty for not offering health care to its employees. Not only does the House bill eliminate this exemption, but it also penalizes small business such that employers with 25 workers or less could end up paying the full 8% payroll tax. Ligon estimates that as many as 68,288 small businesses could fall in the highest marginal penalty range (8%).
Businesses affected by this tax would clearly react to its ramifications, especially during a period of economic downturn. Those who could not afford to offer health benefits or pay the higher tax would look for other ways to outmaneuver the government. This would most effectively be done by containing or reducing wages, and failing to hire additional workers. With an unemployment rate stagnating at 10%, this is the opposite direction in which Congress should be sending small business.
Tags: employer mandates, Obama Health Care Plan, small business
Health Care News
Unions Using Obamacare to Punish Small Business
When does Washington consider a successful small business a problem to be dealt with? When that small business successfully competes against unionized firms. Then it needs to be tied down with expensive red tape until it is no longer so successful.
Say what? Members of Congress routinely extol the praises of small businesses as the engine of job creation – especially in these difficult economic times. This is standard practice on Capitol Hill – small businesses do not have the same resources as large ones, and they often cannot afford to comply with federal mandates. Rather than put them out of business Congress exempts them from expensive regulations.
The Senate health care bill also gives small businesses an out. The bill fines businesses $750 for each employee if the company does not provide more expensive “qualifying” health coverage to all their workers. However, companies with less than 50 workers do not have to pay this fine.
Or at least, that was how the bill was written. A small provision slipped into the bill at the last minute changes that threshold for the construction industry. Now any construction company with five or more workers would have to pay the fine. With a few paragraphs in a 2,074 page bill the Senate gutted the small business exemption for construction companies. (more…)
Tags: construction company, employer mandates, ObamaCare, small business, unions
Health Care News
Small Business Is Not Better Off Under Obamacare
An Issue Brief released yesterday by the Robert Woods Johnson Foundation (RWJF) concludes that small firms would largely benefit from the reform efforts that have been put forth in both the Senate bill (HR 3590) and the House bill (HR 3200). While the benefits from these bills to small businesses already are uncertain – and likely even deleterious – the latest version of the senate bill is even less likely to result in actual benefits for small employers.
Previous Heritage analysis has shown that small businesses would be affected by employer mandate structure under the House bill (HR 3200) and the cost-impact of this “pay or play” mandate is not trivial as the aforementioned RWJF Issue Brief purports. These mandates would effectively reach small firms with less than 25 workers—all small firms with, on average, between 21 and 25 workers— which are the small businesses that are supposed to reap the benefits of reform. (more…)
Tags: DirigoChoice, higher insurance premiums, Maine, small business
Health Care News
NFIB: Senate Health Care Bill Is “A Disaster” for Small Businesses
After “many months of discussion” in which the National Federation of Independent Business was engaged in efforts to ensure that the high cost of health care was adequately addressed in reform legislation, the organization yesterday came out in full force against the Senate health care bill, declaring it a “disaster for small business:”
Small business can’t support a proposal that does not address their No. 1 problem: the unsustainable cost of healthcare. With unemployment at a 26-year high and small business owners struggling to simply keep their doors open, this kind of reform is not what we need to encourage small businesses to thrive.
We oppose the Patient Protection and Affordable Care Act due to the amount of new taxes, the creation of new mandates, and the establishment of new entitlement programs. There is no doubt all these burdens will be paid for on the backs of small business. It’s clear to us that, at the end of the day, the costs to small business more than outweigh the benefits they may have realized.
Tags: business, Harry Reid, health care, NFIB, ObamaCare, small business, taxes, unemployment
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