WASHINGTON, D.C. (May 14, 2015) – The Stop The HIT Coalition, a broad-based group representing the nation’s small business owners, their employees and the self-employed, submitted comments to the Internal Revenue Service (IRS) today regarding the excise tax on high cost employer-sponsored health coverage, also known as the Cadillac tax.
In the comments the Coalition notes: “The small business health insurance tax (HIT) will push businesses closer to the Cadillac tax thresholds [and] the HIT should be excluded from the premium thresholds of the Cadillac tax. Otherwise, businesses will be double taxed for their health insurance. This solution would consistently avoid double taxation, and provide some relief for small businesses from the Cadillac tax.”
The HIT is an often overlooked small business tax in the Patient Protection and Affordable Care Act (PPACA), which will impose $159 billion in new taxes on the small business community, their employees and the self-employed over the next decade. The HIT does not sunset and is expected to cost each family approximately $5,000 in higher premiums over the decade according to an analysis by former Congressional Budget Office (CBO) Director Douglas Holtz-Eakin. This year alone the tax will collect $11 billion from Main Street.
The HIT would reduce private sector employment by between 152,000 and 286,000 by 2023, according to a study by the National Federation of Independent Business Research Foundation. Roughly 57 percent of these job losses will fall on small businesses. The survey also showed that the added tax would reduce U.S. real output (sales) in 2023 by between $20 billion to $33 billion.