White House Admits Obamacare Small Business Failure
The White House released a “fact sheet” this morning on a Treasury budget proposal that attempts to expand and simplify Obamacare’s small business tax credit. The proposal comes after a recent report from the Treasury’s Inspector General finding only 228,000 taxpayers claimed the credit as of May 2011 – far less than the 4 million some outside groups were claiming could receive the credit.
Implementation Failure
The IRS spent nearly $1 million in taxpayer funds to pay for 4 million postcards promoting the tax credit. The mailings did not help. The credit, like the President’s health care law itself, is bureaucratic and poorly constructed. Republicans pointed out more than a year ago that this credit was too complex to be of much assistance to small businesses. Independent experts agree – the non-partisan Congressional Budget Office said before the law passed that only 12 percent of individuals with small business coverage would actually benefit from the credit. The Treasury Inspector General reported that “there are multiple steps to calculate the Credit, and seven worksheets must be completed in association with claiming the Credit.”
Costs on Small Businesses
The President’s health care law’s small business tax credit is having a nonexistent effect on most small businesses. The law is actually imposing new costs and burdensome regulations on businesses.
This week a Gallup survey found 48% of small businesses are not hiring because of the potential cost of health care, and 46% are not hiring because of concerns over government regulations – and both of these problems are due in large part to Obamacare.
The law imposes nearly $800 billion in higher taxes and dozens of new insurance mandates, each of which could raise premium costs by 1-3 percent. An article in the New York Times highlighted the skyrocketing premium increases faced by small businesses, profiling small firms hit with premium increases of 20, 40, even 60 percent or more.
Another Failed Promise
The Administration is belatedly admitting that one part of the President’s health care law is bureaucratic, complicated, and harming small businesses. It would be much better for the Administration to admit that the entire law is, as one analyst put it, “arguably the biggest impediment to hiring, particularly hiring of less skilled workers.”