NCPA - National Center for Policy Analysis


August 26, 2009

Members of Congress left Washington, D.C., for August without passing health care legislation that would expand Medicaid, increase taxes, penalize businesses that don't offer insurance and create a government-controlled insurance market, and that's a good thing for many Oklahomans, says Terry Neese, a distinguished fellow at the National Center for Policy Analysis (NCPA).

But under a bill that the House will consider in September, small businesses would be forced to help foot the bill for new government spending -- at a time when they can least afford it:

  • The House bill includes a surtax on those individuals who make $280,000 or more but doesn't include any exemptions for S corporations or other small businesses, many of which file as individuals.
  • This new tax would push the top tax rate in 39 of the 50 states to more than 50 percent.
  • In Oklahoma, the top small-business and individual tax rate would be 52.23 percent; an estimated 6,400 small businesses in Oklahoma would be subject to these new taxes.
  • The bill also includes a new 8 percent payroll tax on employers who fail to provide "acceptable" health insurance to their employees and businesses with payrolls over $500,000 would be taxed, impacting 63 percent of Oklahoma's small-business employees.

Instead of forcing small businesses to provide health care coverage, policymakers should look for innovative solutions that give small-business owners more choices like expanding health savings accounts or allowing small-business owners to band together across state lines to access health care coverage, says Neese.

Fortunately the House bill is only one part of the equation.  There is a small group of Democrats and Republicans in the U.S. Senate working on a bipartisan proposal that would cost less, mandate less and not rely on costly taxes and surcharges to fund the program, says Neese.

Source: Terry Neese, "Much at stake in debate," NewsOK (The Oklahoman), August 24, 2009.

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