Amidst all of the various mandates and costs that ObamaCare would impose on small businesses, the administration claims that the overhauls’ small-business tax credit would be a great benefit for companies with less than 25 employees and average wages under $50,000 — but the reality is that the tax credit would shrink sharply once a company gets above just 10 workers or $25,000 in average annual wages.
A new study by Mercer (a leading consulting firm) shows that up to one-third of employers, far more than Congress had assumed, could get hit with penalties from a little-noticed provision of ObamaCare, with employers of low-income workers getting hit the hardest — thereby giving them an incentive to avoid hiring, or keeping, low-income workers.
A new study by a former head of the Congressional Budget Office says that ObamaCare would make dropping employees’ insurance the sensible choice for the employers of up to 35 million workers — with the workers’ concurrence. These workers would flood into the government-run exchanges, which would then cost about $1 trillion more than projected over the next decade — essentially doubling ObamaCare’s published price and leading to massive new debt. Once in the exchanges, workers would find that their upward economic mobility would be strongly limited by the exchanges’ extremely high effective marginal tax-rates.
White Castle finds that the new law might cut its net income in half.
The National Federation of Independent Business says that Obamacare’s taxes on small businesses would stifle employment, providing a strong incentive for businesses not to expand beyond 10 or 25 workers.
Obamacare would impose expensive mandates, taxes and regulations on small and mid-sized businesses — and many of these mandates would discourage the hiring of new employees.
Firms say Obamacare’s tax on medical devices, which would begin in 2013, would cost jobs and reduce innovation.