Lurking deep within Obama’s health care law is a little-known tax that is threatening the vitality of America’s biggest provider of private sector jobs. The Health Insurance Tax, or HIT, is a job-killing time bomb. It has already been passed into law and is creating a crisis of confidence among our nation’s small business community. In 2014, it will begin costing small businesses — our country’s number one job creators — not millions, but billions of dollars every year.
Pitched to the American people as a tax on insurance companies, in reality, the HIT is a pass-through tax on small businesses because it is levied on the fully insured market, where the majority of small businesses purchase their policies. This tax, which is included in the Patient Protection and Affordable Care Act (PPACA), will end up crippling our small businesses, saddling employees and the self-employed with skyrocketing costs and forcing small businesses to choose whether or not to offer health insurance to their employees.
The costs associated with the HIT will undermine job creation at a time when America is already embroiled in a debate over our stagnant economy. When the HIT takes effect in 2014, small business owners will be forced to reduce investment in their own businesses or freeze hiring in order to shoulder the new fees. Employees fortunate enough to be employed with insurance coverage could see a $500 reduction in their take-home pay every year, adding up to $5,000 after the first decade alone. This is much-needed money that could go toward a mortgage payment or a grocery bill that instead will be going straight into Uncle Sam’s bottomless pockets.
Although the effort to repeal this tax has been gaining momentum for some time, it intensified in November when Senate legislation was introduced to repeal the HIT, and after worrisome findings by the National Federation of Independent Business Research Foundation indicated the new tax would reduce private sector employment by nearly 250,000 jobs in 2021 and reduce U.S. sales in 2021 by up to $30 billion. The estimated cost to small businesses totals $87 billion over the first 10 years and $208 billion over the following 10 years.
Small businesses have the potential to lead the United States back to economic prosperity and have what it takes to put America back to work. Thankfully, there are some in Washington who recognize the need to protect our small businesses. Senator John Barrasso of Wyoming, Senator Orrin Hatch of Utah and Senator Olympia Snowe of Maine introduced a bill in the U.S. Senate to repeal the HIT before it is too late. The Jobs and Premium Protection Act is companion legislation to a House bill introduced by Rep. Charles Boustany (R-LA) that is co-sponsored by a bipartisan coalition of 86 members of Congress.
In introducing the legislation, Senator Barrasso said, “Our legislation repeals this unfair, hidden tax on America’s job creators, and will save thousands of jobs across the country. This tax is just another example of how the president’s trillion-dollar health spending law is only making things worse for small businesses and their workers. With 9 percent unemployment, hard-working Americans cannot afford to be hit hard by even higher premiums. We need to stop the HIT on our economy now — before it starts.”
Washington, here is your opportunity to support American business. The time to act is now. Stand up for small businesses, the economy and job creation by repealing the Health Insurance Tax.
The Stop the HIT Coalition is a coalition of small business groups from across the country united in their effort to repeal the costly, unfair and hidden Health Insurance Tax (HIT), part of the health care law set to take effect in 2014. Its members include: The National Federation of Independent Business, The National Retail Federation, The National Roofing Contractors Association, The Automotive Aftermarket Industry Association, The Associated Builders and Contractors, The American Supply Association, and The International Franchise Association.