Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at intelligent and rational individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

"Observe that the 'haves' are those who have freedom, and that it is freedom that the 'have-nots' have not." Ayn Rand

"The virtue involved in helping those one loves is not 'selflessness' or 'sacrifice', but integrity." Ayn Rand

04 August 2009

Obama: 98% of Small Businesses Will Not Pay Health Insurance Penalty Tax

The Obama health care programs working their way through Congress in about five versions agree that businesses which do not provide health insurance plans meeting the government's requirements will be forced to pay a penalty tax of 8% of payroll. If a company is forced to pay for family plans, then 8% of payroll will be much less than the cost of providing family health insurance plans to employees. As a result, many firms will not provide health insurance and will pay the penalty tax.

Obama has promised that 98% of all small businesses will not have to pay the health insurance penalty tax. Most people hearing this will assume that this means that surely those firms with fewer than 50 employees will not have to pay such a penalty tax. Or, maybe that surely a firm with 20 or fewer will not have to pay such a penalty tax. You are deceived. Obama is out and out lying to us all.

The HR 3200 bill called the National Insurance Act of 2007 is now being considered for passage by the House of Representatives. It calls for the 8% penalty tax on all firms with a payroll of $400,000 or more. It also calls for penalties from 2% to 6% on all firms with payroll between $251,000 and $400,000. A firm with a payroll of $251,000 is most likely to have 8.8 employees according to 2004 statistics provided by the U. S. Census Bureau. Table 2a on the line for firms with 5 to 9 employees, allows one to calculate the average pay per employee to be $28,531.40 and dividing this into $251,000 of payroll yields 8.8 employees.

Now this may surprise most people who know that small businesses are usually classified as those with fewer than 500 employees. One might tend to think that the category of 98% of small firms might include most of the firms with fewer than 50 employees, since that is only 10% of 500. Since 8.8 employees is almost 9 employees, let us sum up the number of all firms with payroll having fewer than 500 employees from the same U.S. Census Bureau figures and compare their number to those firms having 9 or fewer employees. Taking only those firms with payroll, we find that the firms with 9 or fewer employees are only 78.78% of all small firms with payroll. This is more than 19% short of the 98% Obama promised would not be taxed.

But it is worse than this. There are many more single person, self-employed firms than there are firms with payroll. All of these people are forced to buy health insurance approved by the government under this House bill, so effectively these firms must buy health insurance with no option to opt out, unless they pay a penalty tax of 2.5% of income. Many of these self-employed people have family incomes below $250,000, so Obama is also violating the pledge of no new taxes on people with incomes below that. Furthermore, these self-employed firms with no payroll are surely small businesses. So, those small businesses having the option not to offer health insurance and yet not having to pay the health insurance penalty tax are only 18.21% of the total number of small businesses. So, in reality, Obama's exaggerated 98% of small businesses will not have to pay the health insurance penalty is only about 80% higher than the reality.

Man, can this president tell a whopper of a lie!

I sure remember seeing those bumper stickers that said Bush Lied. Well, President Bush had some faulty intelligence information on Iraq and made a mistake in believing it. But, Obama could not even truthfully use the business payroll and employee information of the U.S. Census Bureau of 2004. This is a real lie, not a mistake!

It is time to put those Obama Lied bumper stickers on our cars!

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