September 28, 2005
- Bill Provides Tax Relief for Small Employers, NASE Executive Director Testifies on Behalf of Micro-Business
- What H.R. 3841 Would Mean for You
- Frist, GOP Bundle Health Care Proposals in Healthy Initiative
- Hurricanes Katrina and Rita
Bill Provides Tax Relief for Small Employers, NASE Executive Director Testifies on Behalf of Micro-Business
Kristie Darien |
Congress must eliminate the self-employment tax on the cost of health insurance for micro-business owners, said National Association for the Self-Employed (NASE) executive director for the legislative office Kristie Darien last week during a House Small Business Committee hearing titled “Reforming the Tax Code to Assist Small Businesses.” Darien also called for the implementation of a standard home office deduction of $2,500.
“The inequities within the tax code that this vital segment of the small business community must contend with are unfair and greatly hinder their ability to contribute to our economy,” said Darien.
The passage of H.R. 3841, the Small Employer Tax Relief Act of 2005, into law would provide the self-employed with a deduction for health insurance premiums in calculating federal payroll taxes as well as the standard home office deduction of $2,500. The bill, sponsored by House Small Business Committee Chairman Donald Manzullo (R-IL), encompasses many other micro-business benefits including the phasing out of the Alternative Minimum tax and permanent extension of small business expensing to $100,000. |
Manzullo’s written opening statement declared the need to eliminate the self-employment tax on health insurance premiums. Additionally, testimony from the National Small Business Association, the National Taxpayer Advocate, and the U.S. Small Business Administration Office of Advocacy reiterated the need for Congress to right this inequality.
“Sole proprietors and partners in partnerships do not receive a business deduction for health insurance premiums. C corporations, on the other hand, receive a deduction for health insurance premiums as an ordinary and necessary business expense for all employees including the owners,” Darien said. “The self-employed are the only segment of the business population that has to pay this extra tax on health insurance.”
The NASE supports the Small Employer Tax Relief Act of 2005 as a way to put micro-businesses on equal footing with large businesses in this country. The NASE has also pushed for the passage of S.663, the Equity for Our Nation’s Self-Employed Act, in the Senate to eliminate the self-employment tax on health insurance premiums.
“The introduction, and hopefully eventual passage of the Small Employer Tax Relief Act of 2005, would greatly assist in removing key roadblocks to success and strengthening the competitiveness of our nation’s micro-businesses,” said Darien.
To read Darien’s complete testimony, visit http://advocacy.NASE.org. |
|
|
What H.R. 3841 Would Mean for You
H.R. 3841, the Small Employer Tax Relief Act, would enact the following changes for micro-businesses:
Provide self-employed individuals with a deduction for health insurance premiums in calculating federal payroll taxes; Permanently extend small business expensing at $100,000; Increase the deductibility of meals and entertainment expenses from 50 percent to 80 percent; Phase out the alternative minimum tax for individuals through 2009; Provide small business employers a tax credit for expenses for long-term training of employees in highly skilled small business trades; Permanently extend the work opportunity tax credit and the welfare to work tax credit; Increase the annual contribution limits to “simple” pension plans to match that permitted to 401(k) plans; Modify the depreciation rules for computer equipment, software, and vehicles; Amend the IRC to treat as a sole proprietorship (rather than a partnership) a business that is owned and operated by married taxpayers; Provide an annual standard home office deduction of $2,500 (indexed for inflation).
|
Frist, GOP Bundle Health Care Proposals in Healthy
Senator Bill Frist’s (R-TN) “Healthy America Act of 2005,” S. 4, combines a number of health care proposals Republicans have been pushing for over the last couple years. The NASE supports these measures as ways to reduce health care costs for micro-business owners.
While it is not likely this bill would come up for a vote on its own, Republicans say these provisions would reduce health care costs and increase the number of insured in this country.
Some of the provisions include:
Association Health Plans (AHPs) – Micro-business owners and employees would receive cost effective and comprehensive health care coverage by allowing them to purchase health insurance in large pools. Health Information Technology – This would establish data storage standards and encourage the use of shared medical information among different medical facilities. Tax Credits – The bill calls for a number of tax incentives to encourage individuals and small businesses to purchase health insurance. Medical Liability Reform – This portion of the bill has received much resistance in the Senate. It would cap non-economic damaged awarded in medical malpractice cases at $250,000. Patient Safety – Recently a provision was passed through Congress and signed into law that called for a national database of medical error reports. The information would be protected from malpractice lawsuits so medical providers will feel free to report.
Frist’s health initiative outlines much of President Bush’s health care agenda. Frist has proposed many pieces of health legislation during his tenure in the Senate but this bill encompasses most of his health legislative goals.
“A consumer-driven system empowers every individual – if they choose so – to make decisions that will directly impact the most fundament and intimate aspect of their life – their personal health,” said Frist in remarks this summer.
The NASE continues to fight for the elimination of the self-employment tax on health insurance premiums, association health plans, the deductibility of health insurance in conjunction with health savings accounts, and health care tax credits.
For more information on the NASE position on health care, visit http://advocacy.nase.org. For more information on the Healthy America Act of 2005, visit http://thomas.loc.gov and search S.4. |
|
Hurricanes Katrina and Rita
For up to date information on hurricane relief, the NASE encourages members in Louisiana, Mississippi, Alabama, Florida, and Texas to utilize these federal resources:
|
|
