• More States Turn An Eye To Small Biz
• NASE Members Speak Up On SE Tax
• Lawmakers Debate SCHIP Coverage

More States Turn An Eye To Small Biz

State governments across the nation have begun to pass legislation that would require legislators to be more mindful of the challenges small businesses face when fashioning new proposals. Following in the footsteps of Texas Governor, Republican Rick Perry, Governors in Hawaii and Tennessee have recently signed similar legislation in their respective states. The laws seek to increase transparency in the regulatory process to allow lawmakers the ability to request that alternatives be presented which achieve the same aims, but do not negatively affect the small business economy. “Tennessee has taken an important step toward creating a regulatory climate in which small businesses can prosper,” said SBA Chief Counsel for Advocacy Thomas M. Sullivan. “The new law will require agencies to take small firms into consideration as regulations are being developed.” Lynne Woods, Chairperson of Hawaii’s Small Business Regulatory Review Board remarked: “By strengthening the role of the Small Business Regulatory Review Board, the new law allows us to continue our work on behalf of Hawaii’s job-creating small businesses.” In 2005, according to Office of Advocacy research, 98.6 percent of Hawaii’s employer firms were small businesses, and they employed 57.4 percent of the state’s private work force. Tennessee is estimated to house about 513,000 small businesses. Read more about the new initiatives at http://www.sba.gov/advo/.

NASE Members Speak Up On SE Tax The NASE recently solicited responses from micro-business owners across the country about how the self-employed tax is affecting them. Sole proprietors must pay the employer and employee share of payroll taxes which calculates to a 15.3% tax on income. This becomes a key disadvantage to those who obtain and pay for health coverage. All business entities, such as corporations and partnerships, receive a full deduction for their health insurance costs and their employees are able to pay for health care with pre-tax dollars. Not so for the self-employed. Sole-proprietors do not receive a full deduction for health insurance. Their health costs are exposed to the 15.3% self-employment tax. Not surprisingly, the many micro-businesses said the self-employment tax on health insurance premiums hurts their business and their ability to afford health coverage. Erin Smith is a lawyer in North Montpelier, Vermont who is currently paying an additional $521.00 as a result of the self-employment tax on health insurance. “The higher my overhead, the more 12 hour days and the more weekends I have to work, which means the less time with friends and family and getting exercise and peaceful activities,” she comments. “I would reinvest it in my business and myself with more time off, so I'd be more refreshed when working.” Other respondents mentioned their struggles to find and keep some sort of health coverage. Denise Nessel is an independent contractor who could be saving about $1,500.00 per year without the self-employment tax. She recently discontinued her insurance because she could no longer afford the premiums: “If I had not had to pay the taxes on the insurance year after year, the insurance itself would not have been such a burden,” she said. The NASE continues to work with Members of Congress to pursue the introduction of legislation that would help make health coverage more affordable for micro-businesses and the self-employed. For more information on efforts the NASE has taken to eliminate the Self-Employment Tax, visit http://advocacy.nase.org/issue_briefs/2007/SelfEmploymentTax.asp. To read more about what the NASE is doing to help level the playing field for micro-business, visit http://advocacy.NASE.org.   Lawmakers Debate SCHIP Coverage   As the deadline to renew the State Children’s Health Insurance Plan (SCHIP) nears, some Republican Senators are sending a message to President Bush. Sens. Chuck Grassley of Iowa, Orrin Hatch of Utah and Pat Roberts of Kansas have written a letter to the White House urging the President not to allow the granting and extending of waivers for adult coverage under the program. According to a statement from the office of Chuck Grassley, the program has been expanded beyond its original intent, covering more adults than children in some states. “The mess created by the waivers makes it even more difficult to reauthorize SCHIP,” Grassley said. “The waivers made program costs mushroom and led to funding shortfalls. Congress had to stopgap those shortfalls, and now Congress has to address the additional costs that come with all the adults that the administration approved for coverage under the children’s health insurance program, as we work to get the program back on track and fulfilling its mission of delivering health care to low-income children.” The Senators also sent a similar letter to U.S. Secretary of Health and Human Services Secretary Michael Leavitt. Proponents of the current adult-including program argue that allowing the parents of eligible children to sign up for the coverage increases the likelihood that their children will be enrolled, thus lowering the rate of uninsured children. To read the July 11th letters, visit the press release section at http://grassley.senate.gov/. Share your experiences as a micro-business owner! Sound off on key legislative issues and get some free publicity for your business in the process by becoming a media contact. Visit www.NASE.org/mediarelations/contactsheet.asp to fill out an informational sheet on the background of your business. Then, send it back to us at the contact information listed on the sheet. If getting involved in the legislative process suits you better, go to the Advocacy page and “Tell Your Story” (http://advocacy.nase.org/issues/issues.asp). You have the option of allowing the NASE to share your micro-business story with your Members of Congress. By allowing the NASE to tell your story to legislators, you can play a vital role in illustrating the real life consequences and affects of issues they debate on a daily basis.