Saturday, July 18, 2009

Health Care Reform And Small Business

Years ago I had an interesting conversation with an entrepreneur that owned a local Handyman Hardware store. We were standing outside his shop and watching construction crews build a brand new Home Depot across the street. "I don't have a problem with competition," he said, thinking about his future. "I just think we should all be on the same, level playing field."
You see, Home Depot received tax breaks and property tax breaks to build across the street. Now, I understand that the Home Depot will employ many people and bring lots of sales tax to the area, but the Handyman entrepreneur had been a good citizen (paying full tax rates) for 30 years. Why not offer him the same deal.
"I don't think they really care if you are here or not," I told him.
Well, some things never change. With the country on the edge of health care reform, it was great to see the recent House Bill that expects small businesses to pay for the many uninsured Americans.
Under the House bill, businesses with payrolls of more than $400,000, must either provide health insurance for their employees or pay a penalty of 8% of their payroll. For those of you who don't own a business, most businesses don't even make 8% (of overall revenues) as a profit. Many are in the 2%-4% range, if they are lucky. This plan would destroy many small firms.
That's not all. The second part of the double whammy is a surtax of at least 1% small firms would have to pay when business earnings exceed the threshold of $280,000 a year.
Don't you think small firms would provide health insurance for employees if they could? I mean, small firms are competing with larger companies for talent.
Here's an idea: If health care is that important to this country (which I believe it is), why don't we have everyone (including the 40% of the population that currently pays NO taxes) help pay the cost.
Politicians love to give lip service to the fact that small firms are "the engine of the economy." Yeah, right. Reality: I don't think they really care.
--Ron Ameln, SBM


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