I sat here for a good 5 minutes before deciding I had nothing "g-rated" to say about this.Kythas wrote:Here's a nice little tidbit for everyone to chew on this morning.
One provision of Obamacare relates to a 35% tax credit to small businesses offering insurance to their employees. This was the provision to which Obama was referring when he said businesses could see a 3,000% decrease in employee healthcare costs (by which, he actually meant $3,000, yet another Bushism that the press doesn't jump on, but I digress).
Under the provision, if a small business has 25 or fewer employees, and an average salary under $40,000, that business will receive a 35% tax rebate of the total amount it pays for employee insurance. If a company pays $10,000 per employee (which is not a large amount for the company portion of employee insurance) and that company has 25 employees and an average payroll of under $40,000, then that company stands to save (($10,000 x 25) x .35) $87,500 due to this tax rebate.
Let's say you own a small business with 26 or 27 employees. What are you going to do? You're going to fire the 1 or 2 people who put you over the employee cap of 25. If you have 25 or fewer employees whose salaries put you over the $40,000 salary cap, you're either going to ask them to take a pay cut or fire them and replace them with people whose salaries won't put you over the top.
You won't give out raises, because any raises will cost your company the cost of the raise, plus the potential of losing the 35% tax rebate. This will have an immediate effect of suppressing salaries and putting experienced workers at a disadvantage in the marketplace, as they will command higher salaries than workers with little to no experience. You'll also think long and hard about hiring any new people, because that 26th hire loses you the 35% tax rebate and makes that 26th position a very expensive one.
Now before you think that 25 employees is a small number, remember this. Small business accounts for about 80% of all jobs in this country. The local McDonald's down the street might be a chain restaurant, but it's probably a franchise store and is owned by Mr. Johnson down the street and is his only store. Mr. Johnson is not going to hire more than 25 people to work at his McDonald's now.
I predict we'll see any economic recovery we've seen to date screech to a halt and unemployment will start rising again. Note this is only one provision in a 2,000+ page bill.
Oh, and the reconciliation bill that also passed the House and is currently in the Senate is, in many ways, worse than the original Obamacare bill itself.
It reminds me of the time I made $600 too much one year and lost my federal pell grant because of it. That $600 cost me $10,000 in student loans.