How would tax deductions for health insurance help start up small businesses?
New business starting out are usually not making much of a profit, if any, in the beginning. If the Obama wants to give them a subsidy for health insurance for the entrepreneur/s and the employees, wouldn’t that subsidy have to take a more direct form?
http://news.yahoo.com/s/ap/20091003/ap_on_go_pr_wh/us_obama
There are two ways in which health insurance reform would help small businesses. First, many people are unwilling to try to start a small business because that would mean giving up the only insurance they can get, which is through their job. If there were a public option they could buy into, it would be much more likely that they would try to start one in the first place. This option would also be available to their employees, relieving them of the burden of trying to provide it for them.
If no public option is included in the reform, then things become much more difficult for the employers/employees. Even with a cooperative, the cost of providing insurance for all employees will probably be prohibitive for the first five years of a new company. So some kind of subsidy would be required. And just like with those who imply that a tax credit would enable individuals to buy insurance, it won’t work for small businesses either. There would need to be a direct subsidy.
This is how small businesspeople feel about health care reform. http://www.allbusiness.com/health-care/health-care-regulation-policy-health/12344124-1.html
Recommended Reading
- Business Insurance Agents
- Small business owner discusses the need for health reform
- John Arensmeyer, Small Business Majority, On Health Insurance Reform
- BOP? – The Basics of Small Business Insurance
- Business Strategic Development (ebook)
Why should anyone get a subsidy? Sink or swim. A subsidy is nothing more then other people paying for another person’s project.
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Theoretically, deducting the premiums should reduce the company’s tax liability. Of course, a loss means no income tax liability in the first place, therefore, no tax benefit from the deduction. If anything, paying health insurance premiums will cause cash flow problems for a small business. A direct subsidy would be the better way, since it would be a direct infusion of cash.
That is of course ignoring the fact that our government is essentially bankrupt, and would have to sell more debt to the Chinese or print more money in order to give these subsidies.
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I’m trying to figure out where you’re coming from. If it’s from the right, you don’t usually want government subsidies of any kind–so to suggest that this particular tax incentive isn’t direct enough is a bit confusing.
Could you clarify your position a bit?
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There are two ways in which health insurance reform would help small businesses. First, many people are unwilling to try to start a small business because that would mean giving up the only insurance they can get, which is through their job. If there were a public option they could buy into, it would be much more likely that they would try to start one in the first place. This option would also be available to their employees, relieving them of the burden of trying to provide it for them.
If no public option is included in the reform, then things become much more difficult for the employers/employees. Even with a cooperative, the cost of providing insurance for all employees will probably be prohibitive for the first five years of a new company. So some kind of subsidy would be required. And just like with those who imply that a tax credit would enable individuals to buy insurance, it won’t work for small businesses either. There would need to be a direct subsidy.
This is how small businesspeople feel about health care reform. http://www.allbusiness.com/health-care/health-care-regulation-policy-health/12344124-1.html
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Start ups will not be helped. You first have to spend the money before you can get the tax credit. If you have no money to spend, no tax credit.
This is just another lie Obama and his band of Criminals are telling to try and fool Americans. Obama’s cult followers eat everything he says and they are blinded by this lies. As for those of us who have eyes and ears and a mind, we are fighting his loony, morally corrupt policies until he is no longer in office.
Health care does not need to be completely overhauled, just enact legislation that directly targets the needs and not the entire kitchen. They could just put salt and pepper shakers on the dining tables but instead they have burned down the kitchen so they can rebuild it when only salt and pepper is needed. What a bunch of macaroons they are.
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A more direct form of subsidy would a tax reduction at the state and federal level. The net effect would be a increase in tax revenues as personnel are added to the payroll.
You are correct though. It’s like, offering the poor food stamps. It doesn’t get them out of poverty, but it helps the day to day survival.
I wonder if Health Insurance expense isn’t already tax deductible for employers anyway…as part of payroll expense. I believe that it already is now. UNLESS his original proposal took health insurance away as a tax deduction for the employer…and now…as part of a concession, he returned it as a legitimate deduction as part of payroll expense.
Oh he’s a tricky one. NET ZERO impact.
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Tax deductions are the Republican answer to this (and everything, apparently). As a small business owner of a fairly new business, it wouldn’t help; I can’t afford insurance for my employees, much as I’d like to. Universal coverage, preferably in low-cost form, would help most. Health care that is reasonably priced, transferable and guaranteed would help a lot of people, workers and employers alike.
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