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Leveling the playing field: why providing health tax equity for our nation's self-employed makes sense.

We are in the midst of serious economic difficulties, and American workers and small businesses are bearing the brunt of the recession. To hasten a recovery, we need to make it easier to run a small business and do away with unnecessary and unfair burdens created by government policies. We have already seen too many businesses close up shop or cut back on employees and expenses. We need to level the playing field to give all businesses the best chance to compete.

Millions of Americans are self-employed entrepreneurs who have decided to take a risk and pursue their dreams. But unfortunately, due to an unfair clause in our tax code, the self-employed are excluded from benefits larger businesses enjoy. To level this playing field, I have joined with Representatives Kind (D-WI), Reichert (R-WA), and Kosmas (DFL) to introduce the Equity for our Nation's Self-Employed Act.

Under current law, corporations are able to deduct the cost of health insurance premiums as a business expense and forgo payroll (FICA) taxes on these costs. But self-employed workers are barred from doing the same, costing them an additional 15.3 percent on their health insurance premiums. While health insurance costs are a major concern of all employers, this tax inequity forces the self-employed to pay an extra $1,940 annually. Coming from a small-business background myself, I am well aware that these types of costs can it difficult to operate a business. They can also make the difference in whether or not business owners are able to obtain coverage for themselves and their families.


With United States on the verge of a health care crisis and millions of people are already without insurance because of rising health care costs, we need to rise above partisanship to overcome these obstacles. The Equity for Our Nation's Self-Employed Act would correct part of the problem by helping to level the playing field for small businesses. It's patently unfair that sole proprietors, a vital engine of job creation and our economy, are penalized with additional taxes because they are not granted the write-offs that larger businesses receive. Our legislation would correct this inequity and help make health insurance more affordable for millions of Americans.

We ought to champion fairness in our tax code and pass this legislation. Economic growth and a level playing field should not be partisan issues, and I am looking forward to working with my fellow Members to correct this unfair provision. In doing so, we will strengthen both our economy and the bold innovators and entrepreneurs who drive its progress.

By U.S. Representative Wally Herger
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Title Annotation:FROM THE HILL
Author:Herger, Wally
Publication:NSBA Advocate
Date:May 1, 2009
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