Healthy Wisconsin is bad medicine

Just prior to passing its version of the state’s budget bill, the Wisconsin Senate attached a $15 billion tax increase on payroll to fund a universal health care plan. While the intentions of the legislative members are understandable, as our current health care system is in dire need of reform, the revenue source that was proposed is short-sided and is a potentially lethal pill for our state’s economy if swallowed by state lawmakers.

For a number of years, the members of the National Federation of Independent Business have been working with legislative leaders to develop a comprehensive health-care reform proposal that would not only make health insurance affordable but the coverage meaningful. It is very concerning that the leaders of our state Senate have endorsed a new job-crushing payroll tax paid by workers and employers, and did so with the passage of a state budget that already included billions of dollars in new spending supported by record-setting increases in taxes and fees.

With 12,000 members in Wisconsin, NFIB represents the individuals that deal every day with the issue of health insurance – they are the employers who struggle to maintain meaningful coverage for their employees and those that can’t afford it (approximately 47 percent of our membership). For those that can’t afford coverage, a payroll tax increase – like the one proposed by the Senate – would devastate many small businesses or eliminate any prospect for future growth.

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A typical NFIB member has fewer than 10 employees and has gross sales of about $350,000 a year. This proposal will discourage small-business creation, limit future investment, and jeopardize the jobs our small businesses provide every day and that are essential to our economic stability. In a recent NFIB survey of our members, 70 percent of our state’s small-business owners are opposed to any statewide health-insurance reform proposal that relies on an assessment on payroll for funding.

Business owners argue a payroll tax is a regressive tax on jobs and will hurt the self-employed, small family-owned businesses, sole proprietors and thousands of firms operating on a small profit margin. In other words, it is a guarantee that Wisconsin will never be home to the next Microsoft or any other innovative entrepreneur.

In June, the NFIB Research Foundation released the results of a comprehensive study, "Small Business Owners on Health Care Policy," and more than 55 percent of the employers that responded feel that health care should be offered voluntarily; 23 percent suggest that it’s the individual’s responsibility.

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According to another survey study, when NFIB members were asked: Should government assess a payroll tax or other sanctions on businesses that do not provide health insurance for their employees? Eighty-six percent said No.

Now we understand that when public-policy decisions are made, there are compromises. However, this is a proposal seeking to fund health care with a new $15 billion payroll tax on businesses regardless of their ability to pay, regardless of their profitability, and regardless of employer and employee choice.

Wisconsin’s small-business owners are not interested in that deal. Even when it is packaged with promises of tax relief and the inclusion of government-funded health savings accounts and choice of plans, small-business owners are convinced they cannot trust this massive overhaul of the state’s health-care system and will not support a new payroll tax to fund it.

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This proposal and other so-called universal health care reform initiatives are simply the wrong medicine for a complex problem.

Bill Smith is the state director of National Federation of Independent Business/Wisconsin.

 

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