Coalition Praises Introduction of H.R. 4961

FOR IMMEDIATE RELEASE

Washington, D.C. -- The National Small Business Association -- along with its Pittsburgh-based affiliate, SMC Business Councils -- is pleased with the introduction of the "Equity for Our Nation's Self-Employed Act" (H.R. 4961) by Reps. Melissa Hart (R-Pa.) and Donald Manzullo (R-Ill.).

"NSBA enthusiastically supports this bill and will make its passage a top priority for the association," NSBA President Todd McCracken said. "It is time, once and for all, for small businesses to be put on equal footing with large businesses when paying for health care."

The self-employed gained the ability to deduct the cost of health care against income tax in 2003, but they are still being forced to pay payroll tax on the income used to purchase health insurance. This situation puts small businesses at a major disadvantage since small-business owners are the only individuals hit with this substantial tax penalty on the value of their employer-provided health coverage.

The 2003 legislation only addressed the deductibility of health insurance premiums as it relates to income tax. The self-employed health insurance deduction still is not considered an ordinary and necessary business expense for the self-employed, as it is for the corporate entity. Therefore, the premiums are still subject to self-employment tax.

The additional 15.3 percent tax paid by small businesses makes already impossibly-priced health care practically obscene by adding what can reach thousands of dollars to the cost of a family's health care.

For more information, visit taxequity.org or NSBA's issue brief.

For nearly 70 years, NSBA has been an advocate for the interests of small businesses throughout the country. The organization, which reaches more than 150,000 small businesses, is proud to be the first national small business advocacy organization in the United States.