Administration officials continue to tout the new health reform law's tax benefits for small businesses, as a GOP lawmaker requests a hearing to explore the validity of the claims.
Reform law tax guidance unveiled; lawmaker urges hearings
In a teleconference, Treasury and HHS officials unveiled guidance for a new program that would provide tax credits and grants to small firms that show potential for producing new, cost-saving bio-medical therapies. The program, created by the health reform law, is designed to “advance research and fund life-saving treatments, reduce long term growth of healthcare costs, and encourage growth in our small businesses,” Treasury Secretary Tim Geithner said.
According to documents released by the IRS, the credit covers up to 50% of the cost of qualifying biomedical research, up to a maximum credit of $5 million per firm and $1 billion overall. It is available only to firms with fewer than 250 employees.
Rep. John Shimkus (R-Ill.), ranking member of the House Energy and Commerce Subcommittee on Health, who isn't sold on all of these benefits, has requested that the panel's chairman Frank Pallone (D-N.J.) hold a hearing on the effects of the new law on small businesses.
“Secretary of Health and Human Services Kathleen Sebelius and Small Business Administration Administrator Karen Mills have both touted the provisions favorable to small businesses in the healthcare law,” Shimkus said in a written statement. “But, the Congressional Budget Office says only 12% of small businesses would realize any benefit at all.”
Shimkus, who made his request in a letter to Pallone, said the new law would raise the Medicare payroll tax; put a new Medicare tax on non-payroll income; tax health insurers; and require loads of new paperwork to be filed with the IRS. “I don't see how any of that helps a small business,” he said.
Administration officials in previous guidance emphasized that small businesses could receive both state and federal tax credits under the new law, and that the credit spanned beyond traditional insurance.
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