NY Times ignores House health bill's exemption protecting small businesses

Written by Morgan Weiland

Published

The New York Times reported that House Democrats' health care bill levels “a payroll tax -- as much as 8 percent of wages -- on employers who do not provide health insurance.” But the Times did not note the bill's exemption protecting small businesses.

In a "news analysis" that ran on the front page of The New York Times' July 18 edition, reporters Robert Pear and David M. Herszenhorn reported that House Democrats' health care reform bill levels “a payroll tax -- as much as 8 percent of wages -- on employers who do not provide health insurance to workers.” However, despite subsequently citing lawmakers' stated concerns about the impact of the bill's tax provisions on small businesses, Pear and Herszenhorn did not explain that the 8 percent payroll tax would only apply to “employer[s] with an annual payroll of more than $400,000,” as they themselves noted in a July 14 article. Nor did they note that companies with annual payrolls of less than $250,000 would pay no penalty for failing to provide health insurance for their employees.

As Media Matters for America has noted, the House Democrats' bill, the America's Affordable Health Choices Act, would establish a 2 percent payroll penalty for employers with combined payroll between $250,000 to $300,000 that don't offer health insurance to employees; a 4 percent penalty for employers with $300,000 to $350,000 in payroll; a 6 percent penalty for employers with $350,000 to $400,000 in payroll; and an 8 percent penalty for companies with annual payrolls exceeding $400,000. Additionally, the bill establishes tax credits for small-business employers that do provide health care.

From Pear and Herszenhorn's July 18 New York Times article, titled, “Democrats Grow Wary as Health Bill Advances”:

On Capitol Hill, the picture is more complex. Representative Jared Polis, a freshman Democrat from Colorado who voted against the bill approved Friday in the Education and Labor Committee, said he worried that the new taxes “could cost jobs in a recession.”

To help finance coverage of the uninsured, the House bill would impose a surtax on high-income people and a payroll tax -- as much as 8 percent of wages -- on employers who do not provide health insurance to workers.

Mr. Polis said these taxes, combined with the scheduled increase in tax rates resulting from the expiration of Bush-era tax cuts, would have a perverse effect. “Some successful family-owned businesses would be taxed at higher rates than multinational corporations,” he said.

In a letter to the House speaker, Nancy Pelosi, Mr. Polis and 20 other freshman Democrats said they were “extremely concerned that the proposed method of paying for health care reform will negatively impact small businesses, the backbone of the American economy.”