Understanding Obamacare - Part III

In Part I, I discussed how the stage was set for the expectation of government provided health care and the hope that we’d get something for nothing. Part II addressed whether Obamacare was truly “affordable” for the average American.

In this part, I take a look at the dark underbelly of the legislation and what I believe is the real strategy behind the designers.

Small businesses are the backbone of our economy. While the big businesses get all the press, it is the small businesses that form the foundation and security of our economy. Headlines carry news about the intended opening of an Amazon headquarter might be, or the earnings of Apple, or the outsourcing of Chevrolet products, but the nitty-gritty mom and pop establishment, the independent insurance agent, the gymnastics lessons for your kids, the attorney on the corner, the lady who opened the McDonald’s franchise in your town, the couple who rolled the dice on the hair salon – they are the basis for our economy.

Some statistics: A small business is any business entity that employs fewer than 500 employees. Small businesses constitute 99.7% of all private businesses employing firms. Small businesses historically provide more than 65% of all newly created jobs. Their exports constitute 97.5% of the total exported goods. The small business sector is comprised of 52% home-based companies. (Sources: US Dept of Commerce; Census Bureau, and International Trade Administration.) “

Before we go further, here’s an important question: Did you know that when liberal politicians attack “the wealthy” as a group, which needs to pay more taxes, they are generally attacking small businesses? It’s true, and here’s why: A basic number is this - $380,000 per year. That sounds like a lot of cash, right? Well, it is if someone hands it to you, tax free. But if you’re a small businessman or woman, that number doesn’t represent your take-home pay. No, that is how much you pulled in to put you in the top 1%, but you still have a lot of obligations to meet – like employee salary and benefits, like income taxes, like improvements, like advertising, like covering theft or vandalism, and much, much more. The typical business owner who forms the fabric of our economy is not a fat-cat riding to work in a limo and taking long vacations in a glamorous location (that’s for Michelle Obama or the administrators of the GAO). No, ask most business owners and they’ll honestly tell you they haven’t taken a vacation in the last couple years, and… and… didn’t take a salary because after paying the business expenses, there was nothing left. Are they complaining? No, that’s a fact of life they’ve come to expect; they’ll work hard for many years, and hopefully, at some point, the business will turn the corner and a real payday and profitability will provide their security for retirement.

So, where does Obamacare fit into this discussion? Workers need healthcare. Workers look for a job that will include healthcare benefits. Under the Affordable Health Care Act, businesses with more than 50 employees must offer health care insurance for their employees, or pay a TAX per employee for failing to do so. Currently, the TAX for failing to offer insurance is $2,000 per employee, with the first 30 employees being exempted – (go figure). So a business with 51 employees will pay $42,000.00 in penalty TAXES  in 2014 if they do not offer insurance. As we saw in Part II, the insurance premiums offered by the Affordable Health Care Act are much greater than affordable by most standards – for low income earners. So, let’s say that an employer hires mostly 35 year-olds, and their premium would be approximately $400/month, or $4,800.00 per year. For starters, if you are being forced by the government to provide this or pay a TAX, and feel that you’re business is in jeopardy, would you rather pay $4,800.00 per year for 51 employees ($244,800.00) or the $2,000 TAX times 21 employees ($42,000.00)?

Okay, now that we realize the employer saves $200,000+ by paying the TAX, we still have 51 people without medical insurance, and a business with $42,000.00 less in profits with which to grow – and hopefully hire more unemployed people. So, the employees still don’t have insurance, the backbone of our economy – small businesses – have $42,000 less, and the TAX disappears into a labyrinth of bureaucracy that hires more government workers to “administrate” the system – employees who will be guaranteed an income surpassing those employed by the small business and guaranteed a benefits and retirement package that must be paid by the taxpayer.

Now, if you are a small businessman or woman, at what point will you stop expanding? Forty-nine employees or fifty? See, this law serves to put a lid on the growth of small businesses. As soon as they exceed 50 employees, they are penalized for doing so due to mandated health care. When so many people are unemployed and underemployed, do we really want the backbone of the American economy to shy away from growth? Do we really want to become a country that discourages people from developing into Ford, Microsoft, Apple, Nike, etc because by doing so, the government is going to turn the entrepreneurs into demons who are portrayed as selfish, greedy land barons as opposed to innovators who provide cutting edge products and putting tons of people to work? Or assuming the business remains “small” – if these businesses are creating 65% of all new jobs in America, do we really want to put roadblocks in their path that serve to interfere with job creation?

This effect is not by mistake. Obama and those behind this legislation did not overlook this outcome. Call me a conspiracy theorist, but I believe it’s more the “end game” than an unfortunate outcome. Barack Hussein Obama has never run a business, nor held a job in the private sector. He is unabashedly socialist – his Congressional record and Presidential actions stand ready to prove this. Our President, despite his rhetoric before crowds, wants the American public to become dependent on government jobs and government entitlements. It’s the easiest path to a redistribution of wealth, and dependency on the cradle-to-grave expectation.

Undoubtedly, every person would like to have health care. But does that make it a RIGHT? Our ancestry in America cherished the right to have an opportunity, as the Declaration of Independence states “…the pursuit of happiness…” and being happy would seem to include being healthy. The key word, though, is pursuit. As much as it would be “nice” for all people to have full access to top-of-the-line healthcare, the question still must be answered, Can we afford this, and is the government of the People and by the People empowered to force the People to pick up the tab?  When the responding law to the desire to provide healthcare puts us in the position of being required to buy government care the typical family cannot afford, while simultaneously punishing businesses that make up the foundation of our economy, AND taxing both businesses and individuals for not buying the mandated insurance, I conclude that our government has moved beyond the intended limited government our Founders designed, and well onto the path of intrusion and tyranny. And if tyranny sounds like I’m using hyperbole to make my point, I encourage you to study the events which led to our Country’s War of Independence; the Founders well understood that once they capitulated on principle – giving up their rights, even a little, the die was cast for anticipating an onslaught of attacks, which put the British government more and more in control of every nuance of what constituted individual freedom.