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Wednesday, July 15, 2009

The Government's Penalties for Success Are Running Into Its Subsidies for Failure

House Majority Leader Steny Hoyer (D-MD) says today in an article by Matt Cover for CNSNews.com that small businesses don't make $280,000 a year, so new health care tax hikes at that level won't harm small business.

Oddly though -- as a commenter on the CNSNews.com website noted -- the Small Business Administration will provide financial assistance to firms making many times that.

If you manufacture cigarettes, for example, you are eligible for Small Business Administration assistance if you have a thousand employees. Setting aside the question of why Congress is subsidizing cigarette manufacturing while penalizing it with sin taxes, can we rationally assume a business with a thousand employees never clears $280,000 a year?

So we appear to have a case in which you are penalized for being rich at the same time you are subsidized for not being rich enough.

But there is a method to Congress' madness, says Rep. Michael Burgess (R-TX), as reported by Adam Brickley and Fadia Galindo for CNSNews.com. The Congressional majority's health care tax plan is designed to harm small businesses sufficiently to force them to cut their employees' health care benefits, thus forcing those employees onto the public health care plan.

So when it looks like Congress is taxing and subsidizing the same people in a completely nonsensical way, we can rest assured that there is a purpose behind it after all -- the purpose of driving as many of us as politically-possible into a substandard, inevitably insolvent public health care plan.


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Posted by Amy Ridenour at 12:36 PM

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