Like most politicians in these difficult economic times, President Obama says he’s all about creating jobs. And, like most politicians in DC, his policies make it clear he has no idea where they really come from.
The latest proof is the forthcoming Health Insurance Tax (HIT) – another prize in the Cracker Jack box known as the Patient Protection and Affordable Care Act, or Obamacare.
The HIT hits insurance companies – specifically, a tax focusing on policies that are purchased by nearly all small businesses and self-employed individuals. The tax would raise a total of $87 billion in the first 10 years and $208 billion in the following 10. This is revenue that will be siphoned from local business owners. It will increase costs, discourage the creation of new jobs, and create a crisis of confidence that leaves small business owners uncertain about future growth.
The NFIB Research Foundation’s BSIM (Business Size Impact Module) predicts the rise in cost of employer-sponsored insurance stemming from the HIT will result in a reduction in private sector employment of 146,000 to 262,000 jobs by 2022, with 59 percent of the job losses coming from small businesses. This will amount to a reduction of U.S. real output (sales) by between $19 billion to $35 billion during the same time frame. A similar study released in 2011 predicted a loss of 125,000 to 249,000 jobs and $18 to $30 billion in sales by 2021.
The full report makes it clear that singling out small business for tax increases – when unemployment is still a major problem – is short-sighted and wrong for our economy. Bipartisan legislation to repeal the HIT was introduced last month in the House of Representatives by Reps. Charles Boustany, R-Louisiana, and Jim Matheson, D-Utah. Let’s hope the DC crowd figures this one out before more jobs go down the drain.