Congress will return to Washington, D.C. after Labor Day to finish their work on a number of issues but none more important than health care reform.
The bill pending in the House expands Medicaid, increases taxes, penalizes businesses who don’t offer insurance and creates a new government controlled insurance market. And after all that, it still leaves people uninsured.
As a small business owner who started her business three decades ago right here in Oklahoma, I understand, first hand, the struggles employers face in providing health care to their employees. There is no doubt that our health care system needs to be fixed, but a government run system that is paid for with new taxes and more mandates on businesses isn’t the answer.
Under the bill that the House of Representatives may vote on, small businesses will be responsible for helping foot the bill for new government spending and at a time when they can least afford it.
To pay for the new spending, the House Democrats are proposing a surtax on those
individuals who make $280,000 or more (the tax would range from 1% to 5.4%). The tax continues to rise the more money you make. The proposal essentially doesn’t include any exemptions for S corporations or other small businesses, many who file as individuals for tax purposes.
This new tax will push the top tax rate in 39 of the 50 states to more than 50%. Here in Oklahoma, the top small business and individual tax rate, according to the Tax Foundation, will be 52.23% if this health care reform bill becomes law. And, it is estimated that 6,400 small businesses right here in Oklahoma will be subject to these new taxes.
But the costs don’t stop with the surtax. The bill includes a new 8% payroll tax on employers who fail to provide “acceptable” health insurance to their employees. Some last minute changes were made to the legislation in the name of helping small business, but when all is said and done, business with payrolls of $500,000 or more will be subject to this penalty – that impacts 63% of Oklahoma’s small business employees.
Most small businesses are struggling with rising costs, smaller margins, and are simply unable to pay for new taxes or mandates. Instead of forcing them to provide health care coverage, our policy makers should look at innovative ways to provide health care, that give small business owners more choices. Ideas like expanding Health Savings Accounts or allowing small business owners to band together across state lines to pool their resources for health care coverage are better alternatives than new taxes and more mandates.
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 bi-partisan proposal that would cost less, mandates less and not rely on costly taxes and surcharges to fund the program – a big improvement from the House legislation but still too early to tell what the fine print will mean for us here in Oklahoma.
What we do know is September or October will bring some type of health care action. It is not too late to let your voices be heard on this issue. Oklahoma’s delegation has held several town hall sessions and they have heard from both sides of the fence on the public option during August recess. The overwhelming majority of Oklahomans who showed up for the sessions believe Oklahoma’s delegation is on the right track: “no” on public option. Check out this website www.freeourhealthcarenow.com
Over one million signatures and counting will soon be presented to congress and the White House indicating these people do not want to see the public option become reality. Small business owners, let’s make our voices heard.
Terry Neese is a successful entrepreneur and a Distinguished Fellow at the National Center for Policy Analysis (NCPA), where she heads the organization's Family Policy Center.
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