GOP Cling To Conservative Study On Tax Credits In Duplicitous Campaign Against Health Reform

By Igor Volsky on May 24th, 2010 at 4:55 pm

Another week, another attempt by Republicans to present the new health care law asthe costly government takeover they said it was. Republicans are all over a new report from the conservative National Center for Policy Analysis that “shows that tax credits in the new healthcare law could negatively impact small-business hiring decisions“:

The new law provides a 50 percent tax credit to companies offering health coverage that have fewer than 10 workers who, on average, earn $25,000 a year. The tax credit is reduced as more employees are added to the payroll. The NCPA study finds the reduction in tax relief to be a cost concern for companies looking to hire additional workers, but operate on slim profit margin yet still provide employee health coverage.

The study has been tweeted by House Minority Leader John Boehner (R-OH),SenateDoctors (Sens. Tom Coburn (R-OK) and John Barrasso (R-WY)), and Rep. Mike Pence (R-IN) but its source and message are somewhat suspect. First, the National Center for Policy Analysisis “a right wing think tank with programs devoted to privatization” of “taxes, Social Security and Medicare, health care, criminal justice, environment, education, and welfare.” The group is funded by conservative Bradley, Scaife, Koch, Olin, Earhart, Castle Rock, and JM Foundations.
Moreover, the argument itself makes little sense. The credit operates on a sliding scale and was designed to aid the businesses that face the biggest obstacles in providing affordable coverage — small businesses that don’t have the advantage of large risk pools. Throughout the health care debate, Senators incorporated amendments from Sen. Olympia Snowe (R-ME), improving the structure of the credit, but legislatures remained aware of the reality of limited resources. Democrats were coming under daily bombardment for presenting a bill that cost too much and were constrained by the president’s price tag ceiling of $900 billion. Now, the very same individuals who claimed that the bill spent too much, are seemingly suggesting that it did not spend enough on small business tax credits.
Stripping the argument of its health care context and extending it to any kind of sliding scale structure only underlines its weakness. Under this logic, any program that caps eligibility is flawed because it encourages individuals to make less so they can continue to receive a government benefit. Rather than help millions of Americans access affordable health care and other social services, all social aid programs actually discourage upward mobility and the progressive tax system pushes Americans into lower paying jobs.
If you believe that people’s decisions center around federal aid guidelines and nothing else, then I suppose have to discount not only the growth of America’s middle class, but also all other small business benefits of the new health care law.