What’s in Obamacare, Part 14:

Encouraging Small Businesses To Keep Wages Low

Small Business Tax Credit:

The new Obamacare legislation will provide a tax credit to small businesses with no more than 25 employees.  The tax credit will be equal to a percentage (50% or less) of the employers contributions to it’s employees health insurance premiums.

Sounds Good Right?

Not quite, there’s a caveat to the Obamacare small business tax credit.   Businesses that pay their employees a smaller amount get a larger tax credit, and businesses that pay higher wages get a smaller tax credit.   The amount of the tax credit is phased out by a ratio of the employers average annual wages.  An employer that has average annual wages of $25,000.00 would receive a tax credit equal to 50% of the employers contributions to it’s employees health insurance premiums.  If the employer has average annual wages of $35,000.00 the tax credit is reduced to 20%.  If the employers average annual wage is $50,000.00 they are not eligible for the tax credit.

Additionally,  businesses must have fewer than 10 employees to qualify for the full tax credit.  So, if you happen to have between 11 and 25 employees you get less. If you have 25 or more employees you get nada.

So What’s The Problem?

Well, the problem is that this small business tax credit provides an incentive for small businesses to keep wages low and slow the creation of new jobs.  After all, if you were a small business owner and you knew that you could get a tax credit for keeping your employees wages low, wouldn’t you be inclined to do so?  And if you would lose the tax credit if you hired more than 10 employees, would you hire more people?  Probably not

Makes no mistake, this tax credit is NOT an attempt by the Obama administration to help small businesses provide health insurance to their employees, nor is it an attempt to stimulate the growth of jobs.  This is an attempt by the Obama administration to stagnate the job market and keep individuals and businesses dependent on the graceful, loving, care of an imperial, federal government.  I can just hear the liberals whispering in our ears,  ”don’t you worry your pretty little heads about responsibility, we can provide you freedom from necessity, we will take care of all of your needs.”   Doesn’t it just make you feel all warm and fuzzy inside?