Bill Aims to Level Tax Playing Field for Self-Employed

WASHINGTON, Sept. 27 /PRNewswire-USNewswire/ -- The Coalition Supporting Equity for Our Nation's Self-Employed, representing over 40 small business organizations, applauds the introduction of H.R. 3660, a bill that would eliminate an inequity in the tax code that requires millions of self-employed individuals to pay an additional 15.3 percent in payroll taxes on the cost of their health insurance premiums.

Introduced by Representatives Wally Herger (R-CA) and Ron Kind (D-WI), the bill allows sole proprietors to deduct the cost of health insurance premiums as a business expense when calculating their self-employment tax. Currently, all business entities except sole proprietors deduct their health premiums as a business expense and forego FICA (Social Security and Medicare) taxes on these expenses. This leaves over 20 million self-employed entrepreneurs facing additional taxes on health costs.

Kathleen Korrison, a self-employed business owner in Arcadia, Wisconsin owns Arcadia Garage Door Company. She is currently paying an additional $1,085.00 in self-employment tax annually, which does not allow her to make regular deposits into her retirement account or her daughter's college fund. In frustration, Kathleen says, "Small businesses like ours have a hard enough time competing and this just makes it tougher. With an extra $1,000.00 per year, we could also put more money aside to update business equipment."

"The self-employed are a critical component of our nation's economy. Our policy and tax code should support, not harm these budding businesses," said Kristie Darien, co-chair of the coalition. "We ask them to grow, to create jobs, to compete, yet we do not provide a fair playing field to allow them so. Passage of the Equity for Our Nation's Self-Employed Act would move us one step closer to parity."

In addition to addressing a significant tax inequity, H.R. 660 would remove strong cost penalties imposed on the self-employed purchasing health insurance. According to the Kaiser Family Foundation, the self-employed pay on average $11,480 per year for family health coverage. Come tax season, since that expense is not deductible when calculating self-employment tax, they pay $1,756.44 more to the federal government in payroll tax on these premiums. No other business entity must pay this added cost.

"With everyone in the country talking about the need for health care reform, Congress should see this as a very important, very doable reform," NSBA President Todd McCracken said. "This simple correction in the tax code would have broad implications-more than 21 million entrepreneurs would have greater access to affordable health insurance under this legislation.

In coordination with Rep. Ron Kind and Rep. Wally Herger, the coalition will be hosting media teleconference regarding this legislation on Thursday, October 4th at 2:00pm. To participate and obtain call-in instructions, please send an e-mail to press@nsba.biz.

For more information about the payment of self-employment tax on health insurance premiums, visit http://www.setaxequity.org/.

    The Coalition Supporting Equity for Our Nation's Self-Employed

    American Farm Bureau Federation
    American Small Business Alliance
    The American Small Business Coalition
    American Veterinary Medical Association
    Arkansas State Chamber of Commerce
    Associated Industries of Arkansas, Inc.
    Associated Builders & Contractors
    Association of Small Business Development Centers
    California Small Business Association
    Communicating for Agriculture & the Self-Employed
    Computing Technology Industry Association
    Council for Affordable Health Insurance
    Council of Smaller Enterprises
    Delaware State Chamber of Commerce Small Business Alliance
    Greater Albuquerque Chamber of Commerce
    Indiana Chamber of Commerce
    Kentucky Chamber of Commerce
    Missouri Merchants & Manufacturers Association
    Montana Chamber of Commerce
    National Association for the Self-Employed
    National Association of Women Business Owners
    National Black Chamber of Commerce
    National Cattlemen's Beef Association
    National Court Reporters Association
    National Federation of Independent Businesses
    National Small Business Association
    New Jersey Chamber of Commerce
    North Carolina Citizens for Business and Industry
    North Dakota Chamber of Commerce
    Rockford Chamber of Commerce
    San Francisco Chamber of Commerce
    Small Business & Entrepreneurship Council
    Small Business Legislative Council
    Small Business Majority
    Small Business United of Texas
    Society of American Florists
    U.S. Chamber of Commerce
    U.S. Hispanic Chamber of Commerce
    Virginia Chamber of Commerce
    Women Entrepreneurs Inc.
    Women Impacting Public Policy