Today marks the one-year anniversary of Obamacare being signed into law - but don’t count on any champagne corks being popped.
Before passage of Obamacare last year, then-Speaker of the House Nancy Pelosi, California Democrat, said Congress needed to pass the bill so we could find out what was in it. Fast-forward one year later, and our worst fears are coming true - and nowhere else are the damaging effects more evident than on America’s entrepreneurs. Given that small businesses employ more than half of the private sector, we should all be deeply concerned.
Small businesses are America’s job creators - responsible for creating seven of every 10 new jobs in the United States. But Obamacare’s job-destroying regulations and taxes are strangling businesses and, along with them, millions of quality American jobs.
To make matters worse, small-business employers and entrepreneurs must comply with a slew of mandates that will only serve to cripple growth. One provision will impose a $2,000 tax per employee on businesses with more than 50 employees that fail to offer health insurance. Businesses that cannot afford the fine won’t hire a 51st employee. Reports have shown that these types of employer mandates alone could lead to the elimination of 1.6 million jobs, with 66 percent of those coming from small businesses.
Businesses also must comply with the expanded 1099 tax reporting requirement, estimated to cost $74 an hour to complete, for virtually every business-to-business purchase over $600. The House and Senate have passed similar legislation to repeal this requirement, and I hope an agreement can be reached soon.
Unfortunately, the complicated, temporary health care tax credit does little to help small businesses purchase health insurance and nothing to curb health care costs. Even if a business is eligible for the credit, the firm may not currently offer insurance and therefore would not receive the incentive. In addition, the nearly 24 million self-employed in our nation would not qualify.
Not only do small businesses lack the resources to hire large human-resources departments to handle compliance with the law, but on top of that, they may not have the ability to get waivers to exempt them from certain provisions of the law as larger, more sophisticated organizations have. Moreover, unelected bureaucrats in federal agencies should not be picking winners and losers in the private sector.
These regulations just scratch the surface. The laundry list of other ways Obamacare harms small businesses includes: imposing a half-trillion dollars in new taxes, threatening a possible 60 percent increase in premiums and forcing about 80 percent of small businesses to give up their current coverage.
As chairman of the House Small Business Committee, I recently had the opportunity to hear testimony from John Eagleton, franchise owner of the Egg & I restaurant in Arvada, Colo. Mr. Eagleton explained how a drop in sales coupled with the new Obamacare regulations could quickly put him out of business: “We’ve invested everything we have in this business … any variable can tip the balance … [and] my family and I will lose our life savings, and 22 other employees will lose their jobs and their livelihood.” These are the real-life implications of Obamacare and why it should be repealed immediately.
So how does this affect you? If small businesses are struggling, that will keep our economy from recovering fully, and that will impact everyone. Businesses will have to make up for the revenue lost in order to comply with all the new Obamacare taxes and regulations, and this means passing off the costs to consumers. This includes higher prices on routine purchases such as clothes, groceries, beauty-salon services or auto repair, not to mention the continued instability of financial markets and personal investments.
Instead of strangling businesses with more red tape, we should be helping pave the way for entrepreneurs to unleash their ingenuity - and repealing Obamacare is the first step in doing this. That is why my House Republican colleagues and I voted to repeal the law as one of our first acts in the new Congress.
We must replace the disastrous Obamacare law with market-driven principles, such as association health plans, a refundable tax credit for premiums and medical malpractice reform. By doing this, we will help more Americans access affordable health care, remove economic uncertainty and allow entrepreneurs to grow and create jobs. Only then will we see jobs created, businesses thrive and our deficit reduced - and that would be a reason to celebrate.
Rep. Sam Graves, Missouri Republican, is chairman of the House Small Business Committee.