Let’s just take a look at some of the taxes and red tape costs that would hit entrepreneurs, businesses, innovators and their employees:
• An increase in the Medicare payroll tax for upper income earners. The total top tax rate for the self-employed would rise from 2.9% to 3.4%.
• A 40% excise tax on more comprehensive health insurance plans.
• Employers with more than 50 workers would face a “play-or-pay” penalty tax of $750 for each fulltime employee if they fail to offer health care coverage.
• An individual mandate for insurance coverage would carry a tax penalty for noncompliance.
• Employers would take on another mandated burden by having to report the value of health benefits on W-2 forms.
• Businesses also would have to send 1099-Misc forms to corporations.
• Over-the-counter, non-prescription medicines could no longer be purchased with pre-tax dollars through HSAs, FSAs, and HRAs.
• The penalty for withdrawing funds from HSAs for non-qualifying expenses would be doubled from 10% to 20%.
• Prescription drug manufacturers would be hit by an annual tax of $2.2 billion.
• Medical device manufacturers would be hit with an annual tax of $2 billion.
• Health insurance providers would face an annual tax of $6.1 billion.
• A 5% excise tax on elective cosmetic surgery.
None of this is good news if one is concerned about entrepreneurship, business investment and innovation, job creation, and economic growth.
Raymond J. Keating
Small Business & Entrepreneurship Council