Health care costs will tax businesses, families
August 7, 2009
To the Editor:
It’s said only two things in life are guaranteed – death and TAXES.
Our Democratic-led Congress is proposing an 8 percent payroll TAX deduction on all businesses that have payroll over $400,000 a year to pay for public health care. If you pay your employees $30,000 this amounts to 13 employees, a small business by any definition. They say this TAX is to fund health care but it will actually amount to higher costs to you, the consumer.
Eight percent for this company of 13 employees is $32,000, all of which will be passed on to you in order for that business to maintain its profit margin. The TAX on a company with a payroll of $1 million (City Market?) is $80,000 – all passed on to you.
The percentage is less if your payroll is less but the bottom line is they are forcing a TAX on almost every business, big and small, to pay for health care. Say goodbye to the dollar menu at Burger King. How about a $2 menu?
Economics 101 says this leads to a domino effect. As the price of products increase because of the payroll TAX what follows is an increase in wages to buy those higher priced products. Now, it’s a $3 dollar menu.
Oh, but wait a minute. The rich will pay for it. People making over $250,000 (or is it $110,000 in the Senate Democratic proposal?) will pay a higher TAX to make up for it. Examine that more closely. Goldman Sachs, the investment banking firm that received $10 billion dollars in bailout money, repaid that money last month. As a firm they paid only 1 percent in TAX last year because of “… changes in geographic earning mix.” In plain English that’s called TAX shelters.
In essence, they used the bailout money to find and take advantage of the TAX shelters and posted a $3.4 billion dollar profit last quarter. We would be foolish to think many of those people will not find TAX shelters in other areas reducing the overall TAX they pay. As part of the domino effect that results in lower TAXES received by the government resulting in the need for more TAX.
So, who ends up paying for public health care? You, one way or the other. Why else do you think the price of a gallon of gas in Canada is twice what it is in the U.S.? The TAX is higher. Charity begins at home, not as a TAX in Congress.
Hot Sulphur Springs