Health Care and the Small Business Tax Credit

Throughout the debate over ObamaCare, the Obama White House and big government health care supporters in Congress proclaimed that small businesses would make out just great due to a small business health care tax credit.

Of course, the reality of this tax credit turns out to be far more limited than what the President and leaders in Congress indicated. Indeed, in the short run, it is limited to very few firms, and over the long run, it's basically useless...

Read the rest of this SBE Council Fact of the Week here.

In addition, a May 20 Associated Press story on this phantom tax credit deserves reading. A few key points:

• Zach Hoffman was confident his small business would qualify for a new tax cut in President Barack Obama's health care overhaul law. But when he ran the numbers, Hoffman discovered that his office furniture company wouldn't get any assistance with the $79,200 it pays annually in premiums for its 24 employees. "It leaves you with this feeling of a bait-and-switch," he said.

• Lost in the fine print: The credit drops off sharply once a company gets above 10 workers and $25,000 average annual wages. It's an example of how the early provisions of the health care law can create winners and losers among groups lawmakers intended to help-people with health problems, families with young adult children and small businesses. Because of the law's complexity, not everyone in a broadly similar situation will benefit.