Small Business Tax Credits: Reality “Doesn’t Match the Hype”
As the Senate continues to debate a small business bill, I wanted to highlight this Bloomberg story indicating that small businesses have not embraced the tax credits created in the new health care law. The quotes from brokers across the country speak for themselves:
James Stenger, director of business development for BenefitMall: “The reality is it doesn’t meet the hype…It’s had very little traction so far…The impact is a lot less than the crafters of this provision thought it would be, at least in New Jersey.”
Russ Childers, a broker in Americus, Georgia: “The income [cut-off for credit eligibility] hurts the worst…It fell short of what was needed to help businesses.”
Steven Selinsky, incoming president of the National Association of Health Underwriters: “It’s just not doing what we had hoped.”
Todd Page, vice president of sales at JLBG Health in Warrenville, Illinois: “We’ve really wanted it to work, because we’d sell more,” said “It just hasn’t worked out, and most firms have been disappointed.”
Thomas Harte, president of Landmark Benefits Inc: “We’re not seeing more people becoming insured as a result of a subsidy coming their way.”
While many small businesses will not be eligible for the tax credits created under the law, they will all pay higher taxes as a result of the measure – taxes and higher premiums for those who buy health insurance, higher taxes on investment income and capital gains, and a 1099 reporting requirement that the National Taxpayer Advocate estimated will affect 40 million businesses – ten times the number of firms the Administration asserts will benefit from small business tax credits. To many struggling small firms, this combination of burdensome new regulations, higher taxes, and an ineffective tax credit represents the furthest thing from health care “reform.”