PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Should Small Businesses Take the HIT?

By at 11 December, 2017, 10:10 am

By Karen Kerrigan –

Entrepreneurs and small business owners are feeling confident about economic conditions and their prospects for growth for 2018. A tax reform package signed before Christmas would top a year where policies have been moving in a favorable direction, which has fueled optimism and has translated into real regulatory relief for small businesses.  But there is one area yet to be fully addressed that is draining small business resources and hurting their competitiveness – burdensome health coverage costs.

President Trump has directed the regulatory agencies to review and take administrative actions to help improve health insurance choices and lower costs.  Repealing the individual mandate in the tax reform package (as the Senate tax bill does) and now in conference would stop penalizing hard-working families and the self-employed for a broken market that is not offering them affordable health choices.  Meanwhile, Congress is working on a package that will delay some of Obamacare’s onerous taxes set to take effect on January 1, 2018 – including the health insurance tax (HIT), which disproportionately hits and hurts the small group market – meaning small business health plans.

UNFORTUNATELY, it has been reported that Republicans negotiating the delay are talking about leaving the small group market out of such relief.  That means the HIT tax might be allowed to move forward on small businesses.

To begin, the HIT tax needs to be repealed, period.  It is a destructive tax that is driving market dislocation and has nothing to do with “affordable care.” America’s Health Insurance Plans has estimated the tax will raise costs by $7,000 over the next ten years for families in the small group market.  No doubt the tax has already made its way into small business health insurance plans. The sooner the HIT is fully repealed, the sooner the markets can begin to heal and costs stabilized for small businesses.

There is no rationale for leaving small businesses out of a HIT tax delay. It’s bad policy, bad politics and will undermine small business confidence and growth in 2018 and beyond.

Why allow the HIT tax to fester and burden our nation’s job creators and innovators? Short of repeal, all insurance markets need to be included in a delay of this destructive tax.

Related articles:

New Health Tax Set to Wallop Americans in New Year, Daily Caller, By Pete Sepp, NTU President

Don’t Take the Hit, National Review, By Ramesh Ponnuru

Karen Kerrigan is president & CEO of the Small Business & Entrepreneurship Council.

 

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