Evidence that small businesses are at risk continues to increase. CNN Money cited an ADP report and a National Federation of Independent Business (NFIB) study that showed small business growth is experiencing a general decline. What is causing this decline?
A Gallup poll released last week found that small businesses are scaling back due to the implementation of the Patient Protection and Affordable Care Act (PPACA). Instead of helping small businesses, the president’s health care law is creating uncertainty with provisions like the health insurance tax (HIT). According to the poll, small business owners’ fear of the effect of the law on their bottom line is “causing nearly half of small businesses to freeze hiring.” In fact, 19 percent of respondents have already reduced the number of employees currently on their payroll to prepare for implementation.
We are seeing evidence of suspended growth, and individuals that support small businesses are becoming increasingly vocal about the HIT. In West Virginia last week, for example, Brenda Nichols Harper, vice president and general counsel of the West Virginia Chamber of Commerce, shared her concern. “We believe that once this tax is being paid, it’s going impact another tax we pay – the unemployment comp tax,” she told the Charleston Daily Mail. “And the reason is because businesses are going to be forced to make choices whether to employ people or pay this tax. The Chamber feels that we have to stop the Health Insurance Tax in order to keep progress we have made in West Virginia still going.”
Similarly, Joe Donaldson of Sam’s Furniture and Erikka Storch of the Ohio Valley Steel Company discussed how the HIT has affected their companies. Joe explained that he has reconsidered expansion plans, which would have added 30 to 40 jobs, due to the HIT, and Erikka told the Coalition that “the considerable uncertainty around health care reform, and specifically the impending health insurance tax, has left us hesitant to hire new employees.”
Small business can’t afford taxes like the HIT that prevent job growth and neither can the U.S. economy. To support the small businesses in your community, tell your Member of Congress to stop the HIT.