Facts are a troublesome detail when it comes to politicians and the promises they make. Politicians are focused on telling people broad statements that are generally true (especially around elections). But facts tend to prove all the polispeak wrong. Like when the Obama Administration touted his tax credits from the Obamacare.
This week the Obama Administration was happy to announce the small business tax credit. It’s available for companies with fewer than 25 workers and average annual wages under $50,000 that provide health coverage. The goal is to help small business, which is the engine for job growth in the nation. The tax credit is supposed to encourage business owners to hire employees, or at least retain workers they currently have, by reducing the cost of health care. The theory, and the political promise, sounds great.
But then there are the facts. The tax credit drops off a cliff if a company has more than 10 workers and $25,000 average annual wages. Why? Because Government math uses a formula combining the number of workers and the annual salary. Thus
So if you have a company of 11 employees making about $26,100 you can get a credit of $21,000 against the healthcare cost of $67,800 annually. But if you have a company with 24 employees making $35,000 and your health care cost is $79,200 (up 15% in a year) you get nothing. That is a fact that the AP found and the Treasury Department does not dispute. But the Obama Administration certainly didn’t word it like that.
In fact, for many small businesses the Government math equation (which has nothing to do with the real math every business in the world uses daily) removes the potential for the small business tax credit completely. If the company is in need of help they have 2 choices from the Government: cut workers salaries and/or fire employees. Given those options the positive impact on the unemployment level and economy does not require a math scholar.
Thus in the first few months from the passage of the Health Care Reform, already we have been given insight to the path the nation will be going down. The CBO has proven that Obamacare will NOT save a dime, in fact it will increase the national deficit over the next 10 years – at least. Adding to that revelation is this new information on small businesses.
President Obama never bothered to mention the details about this. It’s apparent why. Politicians that supported the Health Care Reform (like Senator Kirsten Gillibrand, Senator Charles Schumer, and Rep. Maurice Hinchey – all Democrats from New York up for re-election) are conveinently skipping over the details in their campaign polispeak and political ads. Likely because it might hamper their re-election prospects.
Details make business run. Details keep people employed and bills paid. But details in politics turn great slogans, re-election pitches, and lofty programs into half-fulfilled misstatements and mismanaged Government problems. Which is more likely to improve the economy and grow jobs?