Today’s New York Times carries an interesting piece that reveals how much Washington is pandering to labor unions, while treating job-creating, economy-driving small businesses with outright hostility.
In “Excise Tax Loses Support Amid White House Push,” reporter Robert Pear notes that an agreement between the White House and labor union leaders over an excise tax on more expensive health insurance plans seems to be unraveling. The deal focused on carving out an exception to the 40 percent excise tax for those with collectively bargained benefits. However, given the results in the Massachusetts Senate election – won by Republican Scott Brown – labor bosses have backed off. The Times noted that Brown won union households by a 49%-46% margin.
Other parts of the White House-labor union deal, not made public at the times, according to the Times, were the establishment of a national insurance exchange and increased fines on businesses not offering health care coverage – boosting the fine from $750 for each fulltime employee under the Senate bill to $2,000 per employee.
How to replace the lost revenue from the excise tax? The Times noted: “One possibility is to increase the Medicare payroll tax and extend it to some investment income, like dividends and capital gains.”
Let’s sum up. The deal included higher taxes on businesses unable to offer health care coverage, and a centralized insurance “exchange” that would allow federal officials to more easily regulate and control health care. And if the excise tax proposal falters, the alternative is to jack up taxes on personal income, capital gains and dividends, thereby diminishing incentives and resources available for private-sector risk taking and growth.
This is a recipe for hurting entrepreneurship, small business and the economy.
Raymond J. Keating
Small Business & Entrepreneurship Council