Some Additional Small-Employer Health Care Tax Subsidy Discussion

I've received some very good commentary on my post, from this past weekend, about the small employer health care tax subsidy -- so I'll reprint the back and forth, here:

Anonymous said...

Great idea!! Give tax incentives to keep salaries low. Way to help the little guy.

September 21, 2010 8:48 AM

Condor said...

I take it you mean as opposed to returning the tax break to the richest 1/10th of one percent -- a break President Obama is ending.

In any event, arguing that the health care package will keep salaries low is -- at best -- a selective reading. Afterall, with health care, the effective salary is actually increased (for at least 50 million Americans without health benefits, at present).

So -- it boils down to this will cost some group something -- in order to secure our future. Would you rather that the wealthiest carry their share, or not? If not, vote with the Republicans -- that is the center plank of their entire platform, this time around.

Namaste, and thanks for your observations!

Do stop back.

September 21, 2010 11:16 AM

Anonymous said...


Don't get me wrong, I think there are good things in this law that Fox News is not mentioning, but I think this particular part misses the mark. Why is it tied to salary at all?

If you have 10 employees earning an average of $25K or less you get a 35% tax credit. If you give them a raise or hire more people, your tax credit goes down.

Seems like they're incenting the wrong behavior. If I can think of that, why can't the New York Times? That's all I'm saying.

September 21, 2010 1:47 PM

Condor said...

I do hear you, but I certainly think that small companies with much-higher-per-employee average salaries ought to be able to fund their own health plans, with only a graduated tax subsidy.

If your particular business has only 11 employees, but all are making $100,000 or more (like many a small architectural, accounting, or law firm), it is not clear in my mind that taxpayers should subsidize health care, there.

The measure we are talking about should help lower-skill, lower income positions at small companies remain eligible for some form of affordable health care coverage. Just as the NYT example suggested -- think of a "mom & pop" independent bookstore here.

So, I think it is actually wise policy. In both of our minds, I think, the number of employees ought to be indexed to average earnings -- to be eligible for a sliding-scale tax subsidy -- so I don't think we are arguing about whether a line should be drawn -- only about WHERE it gets drawn, right?

Thanks for the additional input, here.

Namaste

September 22, 2010 8:12 AM. . . .

Now, what do you think?