Imagine running a business today and dealing with the Patient Protection and Affordable Care Act (PPACA aka Obamacare). We know Obamacare is compelling businesses to cut workers’ hours. The latest example appears to be retailer Forever 21 which sent a memo to its employees indicating that the hours for non-management workers would be limited to 29.5 hours per week.
Then there are the new taxes to pay for the health care law as this story in the Tennessean reminds us [emphasis mine]:
Johnny Drake's business is losing 2.3 percent of everything it makes because of the Affordable Care Act.
He's the president of Pathfinder Technologies, a small company in Nashville with fewer than 20 employees, that got hit with an excise tax this year because it makes medical devices.
Medical device manufacturers are among the federal health law losers, those that will have to pay up to cover the cost of implementing it. Others include high-wage earners, tanning salons and, in some cases, working parents and folks with big medical bills. The law generates revenue through a hodgepodge of new taxes, financial penalties and IRS rule changes.
"Every quarter, we're having to send the federal government a flat 2.3 percent of our revenue," Drake said. "I feel like it's double taxation because at the end of the year, we're sending them our federal income tax as well."
Tanning salon owners started having to pay a bigger tax three years ago. Lyvonn Reese, who owns the Hot Spot Tanning salons in the Nashville area, said the 10 percent tax ate away so much of her profit margin that she had no choice but to pass it along. She itemizes "tanning tax" on customer receipts.
Some individuals filing income tax returns next year will also feel the pinch:
People making more than $200,000 annually and couples making more than $250,000 will have to pay a 3.8 percent tax on net investment income when they file next year — and that's not their only new tax.
"If you are in a high-income bracket with investment income and high wages, you might see something you might not have seen before," said Mark Steber, chief tax officer of Jackson Hewitt Tax Service Inc.
The federal health law could add up to a "triple whammy," he said. Besides the investment tax, people with these higher incomes also will have to pay an additional 0.9 percent in Medicare taxes, and many of them already fall into the highest tax bracket, he said.
And let’s not forget the Health Insurance Tax which will be “catastrophic” and “devastating” according to small business owners.
The bottom line is we now have higher taxes which keep businesses and individuals from investing and creating jobs to pay for a health care law that’s not likely to be ready for primetime and that needs to hand out cash prizes to promote it.
What’s needed are reforms that will actually fix the problems of accessibility and affordability while not crushing the economy with higher taxes.