Is penalizing small businesses the best way to fund public health care costs?


Trying to find a way to pay for its $1.04 trillion health-care legislation, the House of Representatives decided to turn to small businesses and the wealthy. Small businesses with payrolls exceeding $400,000 will have to pay an 8 percent of payroll penalty if they don't offer health insurance to their employees. Employers with payrolls of $250,000 to $400,000 would pay a smaller penalty. There would be no penalty on employers with payrolls under $250,000, while some small firms would even get credits to help buy coverage.

In addition to imposing a penalty on businesses that don't provide health insurance, the House proposes collecting additional taxes from wealthy families. Starting in 2011, families making more than $500,000 would have to pay an additional income tax of $1,500 to help subsidize coverage for the uninsured. A family making $1 million would have to pay $9,000.