It is undeniable that small businesses are the engine of our economy, and in these difficult times there is no better way to promote immediate growth than to facilitate their success and foster greater entrepreneurship. But small businesses often struggle to afford the cost of providing health benefits to their employees. Only 45 percent of small businesses can afford to provide health insurance and their costs keep skyrocketing - since 2000 costs have increased by 129 percent. Sixty percent of the nation's uninsured - 28 million people - are small business owners, workers, or their families.
Clearly small businesses need and deserve a break. The Affordable Care Act, our nation's health care reform law, provides just such relief. The law provides small businesses with $40 billion in new tax breaks known as the Small Business Health Care Tax Credit. The Small Business Health Care Tax Credit is available for the 2010 tax year and is aimed at leveling the playing field and making health insurance more affordable for small businesses. If a business has fewer than 25 employees, has average annual wages below $50,000, and pays at least 50 percent of the employees' health coverage, that business could receive a tax credit covering up to 35 percent of their health care costs. The tax credit would grow to 50 percent in 2014.
This tax credit would help a small computer repair shop with 12 employees, average wages of $35,000, and annual health care costs of $90,000 get a tax credit worth $14,700 for 2010 and one worth $21,000 in 2014. Another example would be a diner with 40 part-time employees, which is the equivalent of 20 full-time workers. If the diner had average wages of $25,000 for every full-time equivalent worker and health care costs of $240,000, that diner would be eligible for a 2010 tax credit of $28,000 and a 2014 tax credit of $40,000.
Republicans in Congress want this tax credit repealed. Never mind that it is working - around the country more and more businesses are buying health insurance for their employees because of this credit. Never mind that repeal would mean a tax hike on small businesses. And never mind that those small business owners, employees, and their families would remain uninsured if this tax credit and other Affordable Care Act measures are repealed.
Small businesses create 60-80 percent of new jobs every year. By strengthening the financial position of small businesses and extending tax relief, it will be possible to grow small businesses and put Americans back to work. I strongly oppose repealing health care reform for many reasons, not least of which is because of what it does for our nation's small businesses.