Jobs: the cost of Obamacare’s Health Insurance Tax

JobsLike most politicians during these difficult economic times, President Obama is always all about creating jobs. Also, like most politicians in DC, his policies make it clear he has no idea where they really come from. The latest proof of this observation is the forthcoming Health Insurance Tax (HIT), another prize in the Cracker Jack box known as the Patient Protection and Affordable Care Act (PPACA).

The HIT is a tax on insurance companies, but specifically focused on the policies that are purchased by nearly all small businesses and self- employed individuals. The tax would raise a total of $87 billion in the first ten years and $208 billion in the following ten years. This is revenue that will be siphoned from local business owners. It will increase costs, discourage the creation of new jobs and create a crisis of confidence that leaves small business owners too uncertain about the future to grow.

The NFIB Research Foundation’s BSIM (Business Size Impact Module) predicts the rise in cost of employer-sponsored insurance stemming from the HIT will result in a reduction in private sector employment of 146,000 to 262,000 jobs by 2022, with 59 percent of the job losses coming from small businesses. This will amount to a reduction of U.S. real output (sales) by between $19 billion to $35 billion during the same time frame. A similar study released in 2011 predicted a loss of 125,000 to 249,000 jobs and $18 to $30 billion in sales by 2021.

The full report makes it clear that singling out small business for tax increases when unemployment is still a major problem is short-sighted and wrong for our nation’s economy. Bipartisan legislation to repeal the HIT was introduced last month in the House of Representatives by Reps. Charles Boustany (R-La.) and Jim Matheson (D-Utah). Let’s hope the DC crowd figures this out before more jobs go down the drain.

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About Charles Owens

Charles Owens has been advocating the interests of small business in the Michigan Legislature for over 25 years, beginning with his tenure at the Michigan Institute of Laundering and Dry-cleaning and currently with the National Federation of Independent Business / Michigan. As the State Director of one of Michigan's most respected small business organizations, Owens is responsible for directing the NFIB in its mission to maintain the viability of small business in the face of expanded legislative and regulatory challenges. Owens has been an active participant in the legislative debate over numerous landmark Michigan issues including: the Michigan Environmental Protection Act, inheritance tax, tort liability reform, Unemployment Insurance reform, Workers’ Compensation, and Michigan Occupational Safety & Health Act (MIOSHA) issues. Owens and the NFIB spearheaded the efforts of other small business groups in the fight for fairness and equity for small business in the debate over the repeal and replacement for the Michigan Business Tax. Owens is a 25 year member of the Capitol Club, a dedicated group of association executives committed to the advancement of legislative advocacy for their respective organizations. In 2005 he was elected by his peers to be President of the organization. In 2006, Owens was ranked as number five of the top ten single interest individual lobbyists in Michigan by Inside Michigan Politics. Under his leadership, NFIB was also ranked in the top twenty lobbyist organizations and top ten single interest lobbying organizations by the same publication. Originally a native of Rockford, Illinois, Owens graduated from Northern Illinois University with a Bachelors Degree in Finance and Business Administration. follow on twitter: @OwensNFIB
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