The "Equity for Our Nation’s Self-Employed Act" (H.R. 3660) was recently introduced in the U.S. House of Representatives by U.S. Reps. Ron Kind (D-Wis.) and Wally Herger (R-Calif.) to help put self-employed businesses on equal footing with large corporations by permitting health-insurance premiums to be deducted from both their income and payroll taxes.
Under current law, corporations may deduct health insurance premiums as a business expense and forego payroll (FICA) taxes on these costs. The self-employed however are the only segment of the business population unable to take this deduction and, as a result, pay an additional 15.3 percent tax on their premiums. H.R. 3660 would correct this inequity in the tax code and would take a critical step in helping entrepreneurs gain access to more affordable health-care options.
In these times of spiraling health care costs, the National Federation of Independent Business (NFIB), Wisconsin’s leading small business association, supports H.R. 3660 and commends the efforts of Rep. Kind and Rep Herger for recognizing the disparate treatment the tax code unfairly places on small-business owners.
Small businesses bear a disproportionately large burden of increasing health care costs, leveling the tax playing field is an excellent first step to help them purchase health care with pre-tax dollars. While small-businesses have generated 60 to 80 percent of the net new jobs over the last decade, they continue to battle with double-digit increases to their insurance premium and less choice in the small-group market. Bipartisan collaborations like this legislation are an excellent first step to help reduce the number of uninsured Americans.
On the state level, NFIB/Wisconsin will continue to oppose the government-run "Healthy Wisconsin" health care proposal currently under consideration in the Wisconsin legislature. This bill calls for a $15 billion tax increase on payroll and will severely hurt the self-employed, small family-owned businesses, sole proprietors and thousands of firms operating on a small profit margin.
As the health care issue is debated in countless state legislatures across the country and in Washington, D.C., the NFIB will continue to work with leaders on both sides of the aisle and encourage them to pursue initiatives that increase access to health care by making it more affordable.
Bill Smith is the state director of the National Federation of Independent Business/Wisconsin, a leading small-business advocacy organization.