12 Days of Obamacare Surprises: Small Business Tax Credit
Drew Gonshorowski /
Photo: Mike Kemp/Tetra Images/Newscom
Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next 11 days, Heritage is going to highlight one of the various changes in Obamacare projections (i.e. cost, enrollment, etc.) from when the law first passed until now.
The Small Employer Health Insurance Tax Credit was intended to encourage employers to offer health insurance to their employees by partially offsetting the cost.
In 2010, the Congressional Budget Office (CBO) estimated that the Small Employer Tax Credit would cost the federal government $37 billion over 10 years.
In 2012, the CBO updated its estimate, projecting the credit would cost $23 billion over 10 years.
Surprise: The small business tax credit is now projected to cost $14 billion less than the original estimate. This is largely due to a drastic overestimate of how many small employers would apply or be eligible for the credit. Of the possible 4 million small employers that were eligible, only about 170,000 received the credit. In 2010, the credits paid to small employers were only $468 million compared to the initial cost estimate of $2 billion.
For small employers, this tax credit is more like getting coal in your stocking than a gift.
12 Days of Obamacare Surprises:
1. The individual mandate…