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Small Business Faces Big Bite (8% payroll tax for health insurance)
Wall Street Journal ^ | July 15, 2009 | Janet Adamy

Posted on 07/15/2009 8:28:55 AM PDT by reaganaut1

House Democrats on Tuesday unveiled sweeping health-care legislation that would hit all but the smallest businesses with a penalty equal to 8% of payroll if they fail to provide health insurance to workers.

The House bill, which also would impose new taxes on the wealthy estimated to bring in more than $544 billion over a decade, came as lawmakers in the Senate raced against a self-imposed deadline of this week to introduce a bill in time for action this summer.

Senators face a tougher battle because they are striving for a bipartisan bill. Key senators are weighing a combination of several more-modest fund-raising provisions, including some new fees on health-care industries.

Under the House measure, employers with payrolls exceeding $400,000 a year would have to provide health insurance or pay the 8% penalty. Employers with payrolls between $250,000 and $400,000 a year would pay a smaller penalty, and those less than $250,000 would be exempt. Certain small firms would get tax credits to help buy coverage.

The relatively low thresholds for penalties triggered the sharpest criticism yet from employer groups, who said the burden on small business is too high and doesn't do enough to help them expand insurance coverage.

"This bill costs too much, it covers too few and it has way too much government involvement," said Michelle Dimarob, a lobbyist with the National Federation of Independent Business, the main trade group for small firms. "Small business doesn't want any of those things."

According to 2006 data from the federation, businesses with between five and nine workers, representing about one million employers, had an average payroll of around $375,000 a year. A report from the Kaiser Family Foundation found that only about half of firms with three to nine workers offered health benefits in 2008.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Front Page News; Government
KEYWORDS: payrolltax; smallbusiness; taxes; taxincreases
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The minimum wage is rising about 10% this month. Unemployment is 9.7% and trending higher, according to government figures. And now Dems want an 8% payroll tax for businesses that do not provide health insurance. How high do they want unemployment to go?
1 posted on 07/15/2009 8:28:55 AM PDT by reaganaut1
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To: reaganaut1

Business people know how to play this. You divide your business into two businesses. The “other pocket” game.


2 posted on 07/15/2009 8:32:30 AM PDT by Sacajaweau
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To: reaganaut1
If you are a struggling mid-size business owner and you have a choice between:

  1. Providing health insurance for all employees
  2. Paying an 8% payroll tax if you don't
  3. Cutting payroll by 8% or more in order to pay the tax or provide health insurance . . .

    Three big guesses as to which course you will select.


3 posted on 07/15/2009 8:35:09 AM PDT by Vigilanteman (Are there any men left in Washington? Or, are there only cowards? Ahmad Shah Massoud)
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To: reaganaut1

Pay your taxes. :)

Someone has too...


4 posted on 07/15/2009 8:35:39 AM PDT by Tzimisce (No thanks. We have enough government already. - The Tick)
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To: reaganaut1

The question I have is, assuming enough conservative Republicans are elected in 2010 and hopefully 0 is replaced in 2012, how much of this damage can be undone?


5 posted on 07/15/2009 8:36:36 AM PDT by EscapedDutch ("Socialism is great until you run out of other people's money" - Lady Margaret Thatcher)
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To: Sacajaweau
Business people know how to play this. You divide your business into two businesses. The “other pocket” game.

Shhhhhh. Don't want the mental giants in Washington to catch on to this and add pages and pages of rules forbidding this type of behavior.

6 posted on 07/15/2009 8:38:47 AM PDT by 3catsanadog (I plan to give the new President the same respect and dignity the other side gave Bush.)
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To: EscapedDutch

That’s a good question.


7 posted on 07/15/2009 8:42:26 AM PDT by keats5 (Not all of us are hypnotized.)
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To: reaganaut1

Combine the cost of covering all full-time employees with insurance to the added energy costs of cap and trade, and you are looking at many small businesses closing and laying off or not hiring new employees. You think 9.5% unemployment is bad, you ain’t seen nothing yet.

I would ask “Do the Dems have any idea what they are doing?”, but I think they know exactly what they are doing.


8 posted on 07/15/2009 8:44:17 AM PDT by CarWashMan
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To: EscapedDutch
The question I have is, assuming enough conservative Republicans are elected in 2010 and hopefully 0 is replaced in 2012, how much of this damage can be undone?

How much of SS, Medicare and Medicaid has been undone in years of GOP leadership?

9 posted on 07/15/2009 8:46:39 AM PDT by randita
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To: Vigilanteman
If you are a struggling mid-size business owner and you have a choice between:

1. Providing health insurance for all employees

2. Paying an 8% payroll tax if you don't

3. Cutting payroll by 8% or more in order to pay the tax or provide health insurance . . .

Three big guesses as to which course you will select.

Patriotic Americans will choose #1 or #2.

Sincerely,

Joe Biden

10 posted on 07/15/2009 8:46:55 AM PDT by adm5 (YOU CANNOT FIX CAPITALISM WITH SOCIALISM! -Glenn Beck)
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To: randita; EscapedDutch

It’s a question of guts. The 1994 Republicans actually got some real reforms in. The 2010 Republicans (wishful thinking) will have to have the same mindset.


11 posted on 07/15/2009 8:50:15 AM PDT by GOP_Party_Animal
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To: EscapedDutch
The question I have is, assuming enough conservative Republicans are elected in 2010 and hopefully 0 is replaced in 2012, how much of this damage can be undone?

I don't expect that Obama will permit this to occur. I expect that ACORN will make sure that conservatives are not elected, and more liberals are. Then, I expect that the unspent stimulus money will be released to create a Civilian Security Force that will be used to pacify the country when elections are canceled or stolen.

In 20 years, Obama will still be our Dear Leader.

12 posted on 07/15/2009 8:53:18 AM PDT by Lazamataz ("If they taxed condoms and toilet paper, they'd have us coming and going." - Lazamataz, 2002)
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To: Sacajaweau

If that’s not an option, I guess you could stop contributing to the employees 401K.

Aren’t RATS wonderful??!!!


13 posted on 07/15/2009 8:54:28 AM PDT by freespirited (Money doesn't buy happiness but will pay a research staff to study the problem.)
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To: 3catsanadog

Yeah, they will do the “if you have more than 1 business, the combined total is” or some nonsense.

Who knows? that may be in the bill. After all, nobody gets to read them.


14 posted on 07/15/2009 8:55:05 AM PDT by dforest (Who is the real Jim Thompson? I am.)
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To: randita

I’m not quite as jaded (for once!) SS and Medicare are popular and don’t have organized opposition.


15 posted on 07/15/2009 8:56:06 AM PDT by freespirited (Money doesn't buy happiness but will pay a research staff to study the problem.)
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To: Lazamataz
In that case:

"God forbid we should ever be twenty years without such a rebellion. The people cannot be all, and always, well informed. The part which is wrong will be discontented, in proportion to the importance of the facts they misconceive. If they remain quiet under such misconceptions, it is lethargy, the forerunner of death to the public liberty. ... And what country can preserve its liberties, if it's rulers are not warned from time to time, that this people preserve the spirit of resistance? Let them take arms. The remedy is to set them right as to the facts, pardon and pacify them. What signify a few lives lost in a century or two? The tree of liberty must be refreshed from time to time, with the blood of patriots and tyrants. It is its natural manure."

Thomas Jefferson

16 posted on 07/15/2009 8:59:17 AM PDT by EscapedDutch ("Socialism is great until you run out of other people's money" - Lady Margaret Thatcher)
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To: Vigilanteman

And don’t forget more contract workers. 1099s all over!


17 posted on 07/15/2009 9:00:53 AM PDT by NewHampshireDuo
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To: reaganaut1
That's the ticket, you morons!! Kill the American dream of getting ahead by hard work and perseverance. This is going to destroy America!

Small businesses are the backbone of America. This plan will cost millions of employees to lose their jobs! If they can't kill them with forced employee health care, this additional tax is going to do it.

18 posted on 07/15/2009 9:02:00 AM PDT by NRA2BFree
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To: reaganaut1

looks to be the start of a Golden Age for Indian offshore outsourcing


19 posted on 07/15/2009 9:02:11 AM PDT by Buckeye McFrog
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To: Tzimisce

Work harder, millions on welfare are depending on you.


20 posted on 07/15/2009 9:10:13 AM PDT by savedbygrace (You are only leading if someone follows. Otherwise, you just wandered off... [Smokin' Joe])
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