By Rep. Sam Graves (R-Mo.) - 10/06/09 11:25 PM EDT
The economic prosperity of our nation is undoubtedly tied to the health of our small businesses. Therefore, it makes no sense that the Obama administration is tricking small businesses into giving all their treats to federal tax collectors.
We simply aren’t going to be able to trim the fat of existing programs and sail off into the sunset together. A plan of this magnitude will require billions upon billions of dollars, and the president is looking to pay for it by sticking his hand in the candy bag of small-business owners.
Earlier this month, the House Energy and Commerce Committee completed its consideration of H.R. 3200, the House Democratic version of the Obama health plan. According to the Congressional Budget Office, H.R. 3200 could add $220 billion to the U.S. budget deficit over 10 years, and longer-term deficits are even more ominous. Under this bill the tax increases begin almost immediately, but the vast majority of the spending does not start for four years. A new report issued on Sept. 9 by the Peterson Foundation found that H.R. 3200 would create an additional $1 trillion in deficit spending between 2020 and 2029.
H.R. 3200 requires that all employers with a payroll of $500,000 or more pay a payroll tax of up to 8 percent if they do not provide qualified health insurance to their employees. The taxes punish job growth since the tax rate increases as payroll increases. If an employer chooses to add a worker, the rate of tax on that employer may continue to go up. No matter how profitable or unprofitable a business might be, it is forced to pay this tax.
The current Senate heathcare legislation is another trick masquerading as a treat. Senate Finance Committee chairman Max Baucus’s (D-Mont.) bill saddles small businesses that have more than 50 employees with a new tax of up to $199,600 per year if they do not provide health coverage to their employees. Census data compiled by the Small Business Administration, however, reveals that the Baucus “small business exemption” — for businesses with fewer than 50 employees — will still subject many small employers to new taxes and mandates.
In addition, the Baucus plan mandates that every American buy health insurance or pay a hefty new tax to Washington of up to $1,900 per year. This new tax will take another $20 billion hard-earned dollars from working families. Especially during a recession, this new tax will place another large burden on the family budget.
These projected deficits and increased taxes are not just numbers; they represent jobs. To say that it is counterintuitive to raise taxes on small businesses at a time when we must be working to create jobs to grow the economy is an understatement; it is reckless, dangerous, and threatens to make a bad situation even worse. With unemployment hovering near 10 percent, the highest rate in 26 years, raising taxes on the very people we look to create jobs, provide healthcare and keep our economy running is, without a doubt, the wrong thing to do.
The origins of Halloween go back to the ancient Celtic festival of Samhain. Roughly 2,000 years ago the Celtics celebrated their New Year on Nov. 1. Oct. 31 marked the end of their summer and the beginning of a new season. President Obama and those in Congress who have been crafting bad healthcare reform should celebrate the Celtics’ tradition and start afresh. Let’s wipe the slate clean and find a new potion for reform that doesn’t trick or spook our small businesses from growing our economy.
Graves is ranking member of the House Small Business Committee.