Saturday, July 03, 2010
ObamaCare is Bad for Business
ObamaCare will cost our nation more than $1 trillion. However, as Obama’s health care plan begins to unfold, it is clear it is going to cost our nation more than just red ink. If the mandates and taxes in ObamaCare are left as is, it will cost America growth, innovation and jobs.
Victoria Braden and her team of experts work with small businesses as a human relations/employee benefits consulting firm. She is the CEO and President of Braden Benefit Strategies in Georgia. Braden is well versed in what is to come for her clients as they face benefit changes beginning Jan. 1, 2011 — when new mandates of ObamaCare kick in.
Tucked inside the 2,000-page law are new mandates that will affect business owners. ObamaCare has many of these businesses worried, confused and afraid. Some of her clients have already closed their doors for good. “They are afraid,” Braden says. “They are not sure what’s coming. They hear all these things and they want to know what’s happening.”
Most of Braden’s clients are companies with 300 or fewer employees. Many of the new regulations in ObamaCare affect them. She is taking the changes one year at a time. “I am just taking it one step at a time. My clients are doing all they can to survive now,” she says.
With many of the new taxes and mandates in ObamaCare being rather vague, it will be hard to know what kind of damage they will do to small businesses until they are enforced.
Braden says one big change in 2011 that will hit small businesses hard is employers will be forced to give the same benefits to everyone in the company. She gave this example: If a restaurant owner covers 90 percent of the health care costs for his managers, but only 50 percent of the costs for the rest of his staff, he will be forced to cover everyone at 90 percent or 50 percent. Every employee has to receive the same coverage and their W2 forms next year have to reflect how much their employer contributed to their health care plan.
“I’ve had several companies say that they are just going to drop employee’s insurance altogether because they can’t afford it,” Braden says. The problem is, ObamaCare coverage doesn’t kick in until 2014. Individuals who need health insurance and can’t get covered elsewhere have to be uninsured for at least six months before they can apply to receive the high-risk pool insurance coverage, which provides a buffer for the uninsured until ObamaCare coverage starts. However, even the high-risk pool insurance is underfunded and won’t cover everyone that needs insurance, including people with pre-existing conditions.
Regardless, starting in 2011, employers have to obey this mandate, which includes all full-time employees defined as those who work 30 hours or more.
“As a business owner, when you can’t make payroll, yours is the first to go,” Braden says. “We will see a whole bunch of 29-hour employees — especially in the fast food and retail environments — and an increase in seasonal workers.”
There are many more taxes and mandates that are harmful to the small business environment.
“Small business owners are on the front lines,” says Chief Economist Raymond Keating of the Small Business and Entrepreneurship Council (SBE Council). “They are skeptical and they should be that way.”
Does any part of ObamaCare help small business owners?
ObamaCare does offer a small business tax credit. But don’t be deceived. It is touted as a good and helpful tool for small businesses, but is rendered useless for many of them. There are a series of four tests a business has to go through before they can even qualify for a tax credit. It comes down to the size of your business —t he amount of health care costs you pay per employee and how many employees you have.
Dan Danner, president and CEO of the National Federation of Independent Business (NFIB), comments on this tax credit in a Wall Street Journal article.
“The credit, which is only available for a maximum of six years, puts small business owners through a series of complicated ‘tests’ to determine if they qualify and how much they will receive. Fewer than one-third of small businesses even pass the first three (of four) tests to qualify… More importantly, the credit is temporary, but health-care cost increases are permanent. When the credit ends, small businesses will be left paying full price.”
This doesn’t provide much incentive for a small business who receives a tax credit for only two years to increase its capital and hire new employees when it knows the growth will be short lived.
“ObamaCare is all negative for the small business economy,” says Keating. “Two-thirds of new jobs every year are created by small businesses.”
In this economy, there is nothing needed more than new jobs. The taxes and mandates in ObamaCare are on their way to further damaging our economy and job market.
Many of the mandates in ObamaCare are folded into the health care system over time.
One such mandates is an insurance fee. Overall it is an $8 billion tax — that escalates to $14.3 billion by 2018. This is a tax on insurance companies based on their market share with small businesses paying the bulk of the tax. This law excludes self-insured plans — plans most big businesses and labor unions offer. Therefore this tax will be passed onto plans that a majority of small businesses and individuals buy.
“This is just another tax on small businesses,” Braden says. With so much uncertainty of what 2011 holds for small businesses in regards to ObamaCare, she isn’t even telling her clients about this mandate yet — hoping things will change before it is enforced.
Why is this Administration killing the very engine that drives America?
“I feel like yelling, STOP!” Keating says. “So much damage has been done we need to go back and undo what’s been done. Stop the madness.”
Braden is equally as frustrated. “There are some really good ways to get out of it,” she says about the current situation of the economy and the negative effects of ObamaCare. “There are some great minds out there if we listened. They could figure it out if they’d get out of Washington and listen to the people,” she goes on to say about the leaders of our nation.
“Obama gives lip service to job creation, but his policies are destroying the American dream and the jobs created by small businesses,” says Bill Wilson, president of Americans for Limited Government (ALG).
Entrepreneurs are smart. Those small businesses waiting to see what will happen when more ObamaCare mandates go into effect will adjust to the changes — even if that means less growth and more Americans unemployed and unable to support their families. That would indeed be a new face of America — and not a pretty one.
An email to Ms. Marlan S. Maralit, Organizing Department, American Federation of State County and Municipal Employees
From economist Don Boudreaux
Thanks for your mass e-mail this morning inviting me to recommend students for AFSCME’s Alternative Union Break: Summer Session. I understand that students who attend this four-day program are taught how to “fight for a better country,” and to promote “social and economic justice,” by becoming union organizers.
Alas, I know no student who’d be interested in your program. The young men and women who study economics at George Mason University learn, above all, to think rather than to emote. So our students are rightly suspicious of vague terms such as “social and economic justice.”
Our students learn also that an economy most beneficial to the poorest amongst us is one that is free and competitive – an economy governed by the laws of property, contract, and tort instead of by the arbitrary government diktats that are the fetish of labor unions.
Our students understand that widespread prosperity comes only from entrepreneurial creativity, market-driven investment, risk-taking, and hard work – all in response to the demands of consumers free to spend their money as they choose. Our students know that granting monopoly privileges to politically boisterous groups such as yours reduces, rather than produces, prosperity.
Our students understand that entrepreneurs and firms in market economies gain, not by taking wealth from others, but only by creating wealth and sharing that creation with others on terms that are mutually and voluntarily agreed to.
Oh, here’s one more important fact that our students understand: labor unions routinely promote injustice by lobbying for regulations (such as minimum-wage legislation and the Davis-Bacon Act) that price low-skilled workers out of jobs; by endorsing protectionist policies that deny consumers opportunities to get the most value for their dollars; and by supporting many bailouts and other forms of corporate welfare.
So I invite you to recommend to the young people who go through your program that they attend some of the many programs we have at GMU Economics (and affiliated organizations such as the Institute for Humane Studies and the Mercatus Center) in order to learn how they can truly best promote a society that is prosperous and peaceful.
Young smart-ass Leftist journalist takes a tumble
Blatant bias is still sometimes unacceptable to major news outlets
The resignation of Dave Weigel from The Washington Post’s high-profile blog roll sent a shock wave through the ranks of the DC blogworld. But perhaps his downfall, in so short a time, wasn’t that surprising.
Many of us who have followed Mr. Weigel’s reported posts about conservatives and the Tea Party movement found ourselves buffeted by his often blunt, boyish observations on Twitter. In many ways, he crossed the line of what is considered objective journalism but, in many ways, the Post encouraged opinion and attitude from its flock of young bloggers.
The whole episode seems to point out that while established media organizations want to compete in the blogosphere, they still don’t know quite how to deal with the combination of voice and politics that fuels online debate.
Back when he was writing for The Washington Independent, Mr. Weigel was one of the few bloggers covering the first Tea Party convention step-by-step. He followed real people attending the conference, mining their visions and their reasons for showing up long before Sarah Palin took the stage at the end of the convention.
He was, at that point, someone to watch, whose diligent reporting brought him wider attention, including at the Post. And his straight-laced coverage also seemed to fill a huge gap for the mainstream media — a young engaged reporter who could cover the conservative movement, thus helping offset the criticism of the media as a bastion of the old left.
But in the 24/7 online world, every word is mined for bias — from the right, from the left and everything in between. Watchdogs on the right looked to Mr. Weigel’s intemperate bursts on Twitter and elsewhere for clues to his politics. But it was his acerbic comments on Journolist — the off-the-record water cooler for young, mainly left-leaning writers created by Ezra Klein, another Post blogger — that got him in trouble.
In his public writing he did not appear overly biased but on Journolist, the "private" listserv for Leftist journalists, he was scatological. When Rush Limbaugh went to the hospital with chest pain, Weigel said, “I hope he fails.” Matt Drudge is an “amoral shut-in” who should “set himself on fire.” Opponents are referred to as expletives
Virginia, feds square off over ObamaCare: "The state of Virginia and the [US federal] government were pitched in a legal battle in a federal courtroom on Thursday that could lead to the undoing of the massive healthcare reform [sic] law passed three months ago. Judge Henry Hudson of the U.S. District Court for the Eastern District of Richmond heard the federal government’s arguments to dismiss a lawsuit filed by Virginia that contends the healthcare law’s requirement that all Americans have health insurance is unconstitutional. … While the judge will only decide if the suit can proceed — a decision Hudson said he would render within 30 days — the court heard the first airing of arguments that could make their way to the Supreme Court as some states resist implementing the law.”
Subsidies and bailouts: The Department of Prolonged Childhood: "Adults understand that they must pay a price for the mistakes they make. Children, on the other hand, want constantly to be bailed out … and deserve to be … by their parents. Here’s the mistake you politicians make … We are not a nation of children, and you are not our parents. Turning us all into weak dependent children may be good for the business of politics, but its bad for a culture, and completely unworthy of a country that once referred to itself as the land of the free and the home of the brave."
Prison sentencing reform and the cost of drug prohibition: "A sizeable percentage of those incarcerated in England and Wales are drug offenders; a 2009 report by the International Centre for Prison Studies at King’s College London revealed that 15.5% of those incarcerated are convicted on such charges. At more than £35,000 per inmate year, the cost of simply holding these offenders in prison costs taxpayers nearly £500 million per year. This cost, along with those associated with enforcement of drug laws, should be examined seriously as the government proceeds with its review. The Adam Smith Institute has advocated a more sensible policy, involving the medicalisation of addictive and damaging drugs, and the legalisation of recreational drugs.”
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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)
Posted by JR at 12:29 AM