Legal Commentary

Why NFIB Is Challenging ObamaCare

By Jonathan H. Adler

Dan Danner, CEO of the National Federation of Independent Business (NFIB) has an op-ed in today?s WSJ explaining why NFIB has chosen to join the state AGs? lawsuit challenging the recently enacted health care reforms.  Here?s a taste:

Supporters say the law will significantly help small businesses, focusing on the much-talked about small business tax credit. But the reality is that the tax credit is complex and very limited because firms qualify based on number of employees and average wages. The credit, which is only available for a maximum of six years, puts small business owners through a series of complicated ?tests? to determine if they qualify and how much they will receive. Fewer than one-third of small businesses even pass the first three (of four) tests to qualify: have 25 employees or less, provide health insurance, and pay 50% of the cost of that insurance.

More importantly, the credit is temporary, but health-care cost increases are permanent. When the credit ends, small businesses will be left paying full price. They?ll also be forced to deal with all sorts of new taxes, fees and mandates buried in this 2,000-page law. . . .

Adding insult to injury, the law also requires all businesses to issue IRS 1099 forms to document every business-to-business transaction of $600 or more. To someone who?s never run a business, this may sound like nothing. But Congress hopes to raise $17 billion in added tax revenues and fees from this new mandate. That?s hardly nothing.

The burden of raising that expected revenue falls again on the backs of small business owners who already suffer under unmanageable federal paperwork burdens. What?s worse, this new reporting requirement has absolutely nothing to do with health-care reform. It was included to help pay for the nearly trillion-dollar price tag of the bill. Why should small business owners have to pay for a bill that causes them so much harm? They shouldn?t, which is why NFIB is fighting against this law in court.

NFIB has more on its participation in the litigation here.

[Disclosure: I serve on the advisory board of the NFIB Small Business Legal Center.]

Full post as published by The Volokh Conspiracy on May 27, 2010 (boomark / email).