BEEP-BEEP! Has the new health care law got small businesses chasing a tax break that could suddenly send them off a cliff?
I’m sure it’s evident that I spent way too much time watching Saturday morning cartoons because a cartoon coyote futilely chasing a smug but quick cartoon roadrunner was what I immediately envisioned when I read this U.S. Chamber blog about the new law and the tax breaks that are supposed to be so beneficial for small businesses but may not indeed be.
What many small businesses don’t yet know is that the tax break, if the small business can even qualify for it, will end abruptly with no transition after 2014. Here’s a quick excerpt from that blog which discusses an interview with the U.S. Chamber’s James Gelfand.
The Wall Street Journal: What will the bill mean for the smallest of small businesses?
Mr. Gelfand: Only businesses with fewer than 25 employees that have an average annual salary between $25,000 and $50,000 will receive a tax credit starting this year. So we’ve already ruled out most of the country’s small businesses because they are not eligible. And for those that are eligible, many won’t want to use this credit. Two years after the exchange is enacted in 2014, the credits disappear. There’s no transition, they just go off a cliff and so suddenly a business is having to pay twice as much as they paid the year before in health insurance.
So in addition to going off a cliff suddenly, the small business tax credits may indeed be one of those faux tunnel entrances that the aforementioned smug cartoon roadrunner used to paint on the side of a mountain only to have the eager coyote slam right into it.
The Lubbock Chamber will continue to try to determine and communicate to our members exactly how the new health care law will affect them directly. Information is unfolding daily. For instance, just this morning, the Associated Press reported that the new plan could raise premiums for young people as much as 17% to subsidize rates for older or higher risk individuals.
We hope to bring small businesses in Lubbock more information as soon as it becomes clear. And that means communicating it with the imagery of Saturday morning cartoons if necessary.
Hey! Don’t knock cartoons. A Schoolhouse Rock episode I recall about Bill trying to get through Capitol Hill failed to mention “Deem and Pass,” and came to mind frequently in recent weeks. (I also know from Schoolhouse Rock that it’s okay to begin a sentence with an interjection like I just did, but that it’s probably wrong to begin a sentence with a conjunction since that’s not its function.)
What do you think? Will the new health care law help your small business? Take our poll and comment below!
