One of the President’s bragging points about Obamacare is the small business tax credit he claimed would help off-set the program’s costs and bring health insurance to millions. The administration predicted 4 million small businesses would claim the credit while the Government Accounting Office predicted a smaller, but still considerable number of 2.5 million. Recently, the IRS released the number of businesses that claimed the credit in 2010.
That’s it. The administration over-shot the real number by, well, almost 4 million. It makes you wonder how many of its other rosy Obamacare claims will prove just as false.
According to testimony from an IRS official, the most common reason businesses haven’t claimed the credit is because the forms and requirements are so complex they practically require the business to hire someone just to handle the paperwork.
Small business employers have no incentive to participate in the tax credit plan. In order to comply, a small business owner has to file Form 8941 with the IRS. This 20-line form requires employers to report the number of employees they have, the average amount they are paying them, the total amount spent in premiums on them, and the average premiums for small-group coverage in their area. And that’s just if you have a simple situation.
Alternatively, employers can simply deduct their insurance premiums as a business expense and be done with it. That’s what most, if not all, small employers will continue to do. No small employer will want to compile those records when they can take the easier path.
Or, as Jim Lakely of the Heartland Institute wrote, if a business can afford to hire a new employee, they should “be sure to include that new employee on Line 34 of Page 134, Subsection D(ii) of the forms you must fill out to comply with a government that knows how to run your business better for the “common good.” Alternately, small businesses can simply stay small, cut their employees’ hours to get under the new “full-time” definitions, and putter along until we elect officials who will tear Obamacare up by the roots and full the hole with weed killer so it can never grow back.