Small-business owners are sweating this summer -- and it’s not necessarily because of the weather. Many worry that a form of nationalized health care could soon become law, and that this would cost jobs.
“I give my employees health insurance but I can’t afford to meet the government mandates,” one owner told the National Federation of Independent Business. “I will have to eliminate several employees to reduce my payroll expense.” (NFIB is a trade organization that helps businesses).
“I don’t believe we’ll be able to comply. We will have to eliminate pay increases and Christmas bonuses. Full-timers will be eliminated and all staff will be part-timers, and that will likely be insufficient,” another added.
“In general, H.R.3200 will hurt my business due [sic] to increasing my costs. Ultimately that may mean letting people go. How is that helping the economy or small business?” wondered a third owner. No wonder NFIB has come out in opposition to the “reforms” proposed in the House of Representatives.
Many politicians insist they can add a government-run “public option” health insurance plan on top of the trillions of dollars in obligations our federal government is already facing. But small-business owners know better.
The government plans have a big problem: The extra taxation and spending would destroy many small businesses, the very foundation of the American economy.
Half of all private workers in the U.S. are employed in firms with fewer than 500 workers. These small firms have also created somewhere between 60 and 80 percent of all new jobs in the last decade.
But some politicians are willing to endanger that growth. Rep. Charlie Rangel, D-N.Y., chairs the crucial Ways and Means Committee. To pay for health care “reform,” he wants to slap a surtax on roughly 2 million tax filers.
Some 60 percent of these returns reflect money made by a small business or partnership. While 400,000 of people affected by the surtax derive most of their adjusted gross income from a small business, these taxpayers already shell out one quarter of all income taxes. They represent our economic foundation.
The proposed extra tax would be on a sliding scale: 1 percent for joint filers with more than $350,000, 1.5 percent for joint filers with more than $500,000, and 5.4 percent for joint filers with more than $1 million in adjusted gross income. In addition to higher taxes, the House health care bill would force small businesses with at least $250,000 in payroll to provide health insurance or pay a tax penalty up to 8 percent of payroll.
And as if the initial proposed tax rate wasn’t high enough, there’s every chance it could go up.
The House bill would empower the Office of Management and Budget to jack the tax rates up to 2 percent for those making $350,000 and 3 percent for those making less than $1 million, if bureaucrats decide that’s necessary. Businesses would have an even harder time preparing for the future, because they’ll never be able to know when their taxes may increase or how high they’ll eventually go. Few business owners would hire new workers under those conditions.
The national unemployment rate in July reached 9.4 percent, and of course we all want to bring that number down by creating as many jobs as possible, as quickly as possible. To do so we need to shore up small businesses, not chip away at them with higher taxes and expensive mandates.
As summer winds down, Obamacare seems to be on life support. Small-business owners have spoken. We ought to pull the plug, and start over again with an effective reform plan that won’t hammer our nation’s economy.