- $154 Billion Tax on Small Businesses. The bill would impose a 5.4 percent “surtax” on the modified adjusted gross income of individuals – including many small employers who file as individuals. According to the Joint Committee on Taxation (JCT), one-third of this tax increase (about $154 billion) would fall on the income of small businesses – making it harder for them to meet payroll and avoid layoffs. Worse yet, the income thresholds for this tax are not indexed for inflation, meaning each year it will ensnare more and more families and businesses.
- Payroll Tax Penalty to Hit a Majority of Small Businesses and Their Employees. Under the House Democrats’ bill, employers who fail to provide coverage that is deemed “acceptable” by the new Health Choices Commissioner would have to pay a payroll tax of up to 8% of wages. According to data provided by the Kaiser Family Foundation, more than half of small employers with fewer than 200 employees currently fail to meet that standard and thus would be forced to spend even more of their income on health benefits or become subject to the payroll tax.
- Half-Million Dollar Penalties for Unintentional Failures. The House Democrats’ bill also imposes on employers who promise to provide government-approved health insurance to their employees, but fail to do so at some point a penalty of $100 per day, per uncovered employee. Small businesses committing an unintentional mistake still could be subject to a penalty of $500,000.
- Massive Tax Increases Mean Massive Job Losses. The House Democrats’ bill raises taxes by a total of more than $750 billion over the next decade. Using methodology developed by Christina Romer, President Obama’s top economic advisor, these tax hikes could cost the country 5 million jobs, something this morning’s news shows we can scarcely afford.
- “Economic research has shown time and again that mandates such as these are a “one-two punch” where the cost is first borne by the employer, but is ultimately borne by the employee – through job loss and lower wages.” National Federation of Independent Business