ObamaCare and Small Businesses

A recent report on the impact of ObamaCare on small businesses focused on the tax credits. One important question is about the number of small businesses that will benefit from the credits. There are two significantly different estimates in Wisconsin:

The liberal groups’ estimate assumes that every small business, driven by the new incentives, will begin offering health insurance and paying at least half the premium, and thus about 86,100 small Wisconsin businesses would get the tax credits.

The NFIB is less gung-ho and calculates its estimate using the status quo, the number of small businesses in the state currently offering health insurance and paying at least 50 percent of the premium. Its projections don’t factor in any increases in coverage by small businesses due to the incentives. The business group finds that just 29,944 small businesses would qualify.

Advocates of ObamaCare seem to think that many small businesses will sign up for insurance due to the help of the credits. Until 2014, credits will range from 25% to 35% of premiums, depending on the number of employees and the average wages. In 2014, small businesses will be able to receive up to 50% credit for premiums if they purchase insurance in the government exchange.

Will businesses buy insurance simply to receive the credit? Of course not, as that would still be added cost for the businesses. The credits, however, may make insurance more affordable for some small businesses. That could mean that some employees at small businesses that would not otherwise have coverage could end up with it. But in 2014, when mandates kick in, the net gains could be wiped out by net losses as a lot people drop or lose insurance due to the combination of regulations and prices.

TIME recently examined the business mandate, citing San Francisco’s mandate as an example:

But according to the new report co-authored by Dube, 61% of San Francisco restaurants are very or somewhat supportive of the mandate. This may be because restaurants in the city have found a way to pay for their increased benefit costs without absorbing the expense: many have added a 3% to 4% health care surcharge to customers’ bills.

That businesses have passed the additional costs onto consumers is an important point. Increases in costs for business, in the form of higher premiums or fees from ObamaCare, will have to be paid for. Ultimately, businesses will have to either pass on the additional costs to employees in the form of higher out-of-pocket costs and premiums, to customers in the form of higher prices, or businesses might simply cut benefits to keep costs down.

Businesses aren’t going to buy insurance simply because of mandates or tax credits. They are going to buy insurance if it helps attract and retain employees, and if they can save money by doing so. One provision of ObamaCare that has been debated in Congress will certainly raise the cost of doing business, and that is the requirement to create 1099 forms for business transactions. Small businesses will likely be hit the most by this requirement, so Congress has been considering its repeal.

As Ed Morrissey notes, however, Democrats do not want to repeal the requirement unless they can add more taxes on businesses. This certainly doesn’t help the Democrats’ pro-business argument, and it points to a general concern about ObamaCare’s impact on businesses.

The bottom line is that more businesses are likely to be hurt by ObamaCare than helped by it.

UPDATE: The National Federation of Independent Businesses says that the number of small businesses who will qualify for ObamaCare credits is much smaller than proponents suggested.

What Newt Gingrich Understands About the Jihad, and the Administration Does Not

Newt Gingrich wrote a piece this week arguing against the construction of a mosque at Ground Zero. Anyone who doesn’t understand why building a mosque at Ground Zero is a dangerous idea, or anyone who believes that not allowing the construction of a mosque there would be intolerant, needs to read what Gingrich wrote. After describing what the mosque would symbolize, he concludes:

Building this structure on the edge of the battlefield created by radical Islamists is not a celebration of religious pluralism and mutual tolerance; it is a political statement of shocking arrogance and hypocrisy.

We need to have the moral courage to denounce it. It is simply grotesque to erect a mosque at the site of the most visible and powerful symbol of the horrible consequences of radical Islamist ideology. Well-meaning Muslims, with common human sensitivity to the victims’ families, realize they have plenty of other places to gather and worship. But for radical Islamists, the mosque would become an icon of triumph, encouraging them in their challenge to our civilization.

Apologists for radical Islamist hypocrisy are trying to argue that we have to allow the construction of this mosque in order to prove America’s commitment to religious liberty. They say this despite the fact that there are already over 100 mosques in New York City.

In fact, they’re partially correct—this is a test of our commitment to religious liberty. It is a test to see if we have the resolve to face down an ideology that aims to destroy religious liberty in America, and every other freedom we hold dear.

Update on Uighur Detainees, and Another Bagram Test

Lyle Denniston at SCOTUSblog has the latest on detainee cases. In one case, five Uighurs have asked for a rehearing. Another intriguing situation is the challenge to the use of a U.S. prison in Bagram, which is now going back to lower court to allow for the submission of new evidence:

Setting the stage for a new challenge to the U.S. government’s use of a prison in Afghanistan to hold detainees who had been captured outside that country, the D.C. Circuit Court has told lawyers for three prisoners there that they may offer new evidence to a federal judge in a renewed test of their captivity.  The lawyers have argued that the evidence shows a government plan to hold prisoners there indefinitely, and without charging them with any crime.  The Justice Department has not yet responded to that claim, but will have a chance do so when the case returns to U.S. District Court.

Judge Issues Injunction Against Key Provisions in Arizona Immigration Law

A U.S. District judge’s decision yesterday to issue a temporary injunction against Arizona’s enforcement of its new immigration law is a significant blow to the state’s efforts. The case could be appealed, however, and the state legislature may amend the law based on the ruling to give it a better chance of holding up.

The ruling is interesting in that the judge determined some parts of Arizona’s law were indeed preempted by federal law, but that the entire law would not be struck down (SB 1070 contains a severability clause respected by the judge). Even though some parts of the law survived, however, the key provisions of Section 2B were struck down. That section reads:

For any lawful stop, detention or arrest made by [an Arizona] law enforcement
official or . . . law enforcement agency . . . in the enforcement of any other law
or ordinance of a county, city or town of this state where reasonable suspicion
exists that the person is an alien and is unlawfully present in the United States,
a reasonable attempt shall be made, when practicable, to determine the
immigration status of the person, except if the determination may hinder or
obstruct an investigation. Any person who is arrested shall have the person’s
immigration status determined before the person is released.

Breakdown of House Elections

Power Line’s Paul Mirengoff posted a summary of recent election analysis showing the various House seats in play this year. Based on the polls in toss-up, Democrat-leaning, and Republican-leaning elections, Mirengoff concludes that the situation looks good for Republicans at the moment.

Clear Contrast: Three Campaign Points for Republicans

The economy is still the dominant issue on Americans’ minds, as other hot button topics have taken a back seat. With the top three issues of concern being the general economy (31%), unemployment/jobs (22%), and dissatisfaction with government (11%), here are three simple points for the GOP to hammer home until November, and an explanation of each below:

1) A Democrat majority means higher taxes and higher cost of business that will hurt investment and job creation. A Republican majority means not raising income tax rates, cutting corporate tax rates, more investment, and more jobs.

2) A Democrat majority means more regulations and more uncertainty, which will also choke the private sector and  limit job growth. A Republican majority means repeal of burdensome schemes like ObamaCare, and a regulatory framework designed to do its job, not to grow government while allowing the same problems like the financial overhaul will.

3) A Democrat majority means more politics of the worst kind: corruption, backroom deals, abuses of legislative procedures, disregard for the Constitution, etc. A Republican majority means a return to the Constitution, respect for procedure and the rule of law, and more transparency.

‘The Unpresidential President’

The Weekly Standard has a must-read feature piece about how President Obama has diminished himself and the presidency. Key segments:

A president who has become his own chief point man puts at risk an asset that is helpful to his standing and vital for the nation’s political system: the dignity of the presidential office.

Obama’s embrace of a populist campaign style generated enough consternation that he backtracked temporarily. In a commencement address at the University of Michigan on May 1, Obama adopted a more statesmanlike posture, deploring the lack of “civility” that is “starting to creep into the center of our discourse.” “We can’t expect to solve our problems if all we do is tear each other down. You can disagree with a certain policy without demonizing the person who espouses it.” To emphasize his impartiality, he sought to put himself above the fray, decrying the excesses “practiced by both fringes of the ideological spectrum, by the left and the right.” Yet far from calming the country, this lofty tone served only to grate on those who found in this speech a repetition of a by now all-too-familiar Obama tactic of earnestly preaching what he does not practice—a technique he has used especially in those matters in which “fairness” and “good government” are most at issue, such as the public finance of campaigns (which Obama supported before exempting himself) or the promise of post-partisanship (which he abandoned from almost his first day in office). For a statesmanlike speech such as the one Obama gave in Michigan to work, the speaker must have cultivated the “ethos” of presidentialism. Obama had long since given up on this effort.

…

To be presidential, a president must practice presidentialism constantly, to the point that others have no choice but to view him as sincere. Obama has professed to regard George Washington and Abraham Lincoln as his models, but there is no indication that he has studied how either man conducted himself as president. They jealously guarded the dignity of the office; Obama is heedlessly frittering it away.

Romney vs. Lugar on New START

It appears we have a pretty good debate taking place over New START. In response to Mitt Romney’s piece from earlier this month that called New START “Obama’s worst foreign-policy mistake” (which I posted at the time), Senator Lugar countered.

Now, Romney is addressing Senator Lugar’s challenge with a summary of eight problems with New START.

Who wins this debate? Decide for yourself. Also, answer these questions: How many potential presidential candidates are offering serious policy analysis of this issue right now? And what in-depth defense of New START has our current president offered to suggest his competence on this issue?

ATR: Small Businesses Facing Tax Increases

As Democrats debate the no-brainer of extending Bush tax cuts, Americans for Tax Reform has an analysis of the burden on small businesses that would be imposed by expiring rates for the top two income brackets. A vote for the Democrats this November means:

• All small businesses. There were 30 million tax returns reporting small business income in 2008.  On net (profits reduced by losses), these owners reported business profits of $981 billion.  A large chunk of this net profit–$488 billion—faced taxation in households making more than $200,000 per year.  A majority of small business profits will face a tax rate hike under the Obama-Pelosi-Reid plan.

• Sole proprietors. There were 22 million tax returns reporting sole proprietor income in 2008.  On net (profits reduced by losses), these owners reported business profits of $264 billion.  A large chunk of this net profit–$90 billion—faced taxation in households making more than $200,000 per year.  34 percent of sole proprietor profits will face a tax rate hike under the Obama-Pelosi-Reid tax hike plan.

• S-corporations and partnerships. There were 8 million partners and S-corporation shareholders in 2008.  On net (profits reduced by losses), these owners reported business profits of $717 billion.  A majority of this profit–$398 billion—faced taxation in households making more than $200,000 per year.  55 percent of S-corporation and partnership profits will face a tax rate hike under the Obama-Pelosi-Reid tax hike plan.

[Emphasis in original]

House Dems Bring Back Public Option

It’s not over. With deficits increasing, some Democrats think they have a selling point, but will people really believe that a public option is going to reduce the deficit? More specifically, would it reduce the deficit without significantly limiting the quantity and quality of healthcare? Not many people seemed to believe that by the time ObamaCare passed, but some Democrats were never going to give up.

A public option for health insurance won’t be the only pitched solution for our budget woes either. There will likely be tax increases on the table, and anyone who opposes them will probably be called for a “bluff” on deficit reduction (as if spending reductions aren’t an option). Not all Democrats are crazy enough to want the Bush tax cuts to expire, however, but the more moderate voices will have a tough time convincing the liberal leadership.