Limbaugh: "[I]t looks like small businesses are gonna lose their tax breaks for health coverage"

From the October 29 broadcast of Premiere Radio Networks' The Rush Limbaugh Show:

LIMBAUGH: From the new House bill. I've got a couple of passages from it here, the thing Pelosi announced today. It's -- I wanna read it to you just to show you what we're going to be dealing with. Now, as I go through this, it -- this section I'm gonna read part of, it looks like small businesses are gonna lose their tax breaks for health coverage.

Limbaugh explains he doesn't really understand what he's reading: "[I]t's hard to tell from the damn convoluted language." Immediately after claiming small businesses are going to lose their tax breaks, Limbaugh said: “Right now, small business gets a tax break for providing health coverage. It's gonna be -- it looks like it's gonna be phased out in two years. But it's hard to tell from the damn convoluted language.”

Section at issue actually creates a tax credit

Section creates a “credit for small business employee health coverage expenses.” The section of the version of the health care bill that Limbaugh cited, Section 521 of Division A, would add an additional small business tax credit for health coverage to the Internal Revenue Code; it would not take a tax credit away. An employer could take that tax credit for a maximum of two years. From the bill:

"(a) IN GENERAL.--For purposes of section 38, in the case of a qualified small employer, the small business employee health coverage credit determined under this section for the taxable year is an amount equal to the applicable percentage of the qualified employee health coverage expenses of such employer for such taxable year.

[...]

"(c) LIMITATIONS.--

[...]

"(3) CREDIT ALLOWED FOR ONLY 2 TAXABLE YEARS.--No credit shall be determined under subsection (a) with respect to any employer for any taxable year unless the employer elects to have this section apply for such taxable year. An employer may elect the application of this section with respect to not more than 2 taxable years.

Committee summary says that bill makes a tax credit “available” for small businesses. From the summary:

Small business tax credits. Small business tax credits are available for businesses with 10 or fewer employees and $20,000 or less in average wages. The credits phase-out if the employer has 25 or more employees or if average wages are $40,000 or more. The credits are available on rolling basis for the first two years that an employer offers qualified coverage.

Limbaugh is an integral part of health care misinformation echo chamber

False claim that health bill outlaws private insurance spreads from IBD to Limbaugh to Fox. On July 16, Limbaugh quoted an Investor's Business Daily editorial that claimed that a section of one of the House health care reform bills includes “a provision making individual private medical insurance illegal” and that the “provision would indeed outlaw individual private coverage.” Later, Fox News hosts Sean Hannity and David Asman cited the editorial as well. In fact, IBD's claims were false; the bill IBD was discussing did not outlaw private insurance.

Limbaugh cited discredited McCaughey for proof that “death panels” exist." On August 27, Limbaugh stated, “Betsy McCaughey, who is one of the people doing yeoman work deciphering the contents, the details of every Democrat [sic] health care plan that's proposed, starting with Hillarycare, has another piece today in The Wall Street Journal." He then read from McCaughey's op-ed attacking Obama administration official Dr. Ezekiel Emanuel. Limbaugh later stated of Emanuel: “Here is your death panel head honcho. He's Obama's lead adviser. I don't want anybody to ever call here again and tell me there aren't death panels.” McCaughey is a serial health care misinformer whose claims about both Emanuel and end-of-life provisions in the House health care bill at the time have been debunked.

Bloomberg “commentary” health IT falsehood goes from Limbaugh to WSJ's Moore and Fox, back to Limbaugh. In February, Limbaugh repeated a falsehood in a Bloomberg “commentary” by McCaughey that claimed that under a provision in the House-passed economic recovery bill, "[o]ne new bureaucracy, the National Coordinator of Health Information Technology, will monitor treatments to make sure your doctor is doing what the federal government deems appropriate and cost effective. The goal is to reduce costs and 'guide' your doctor's decisions." In fact, the provision at issue did not do what McCaughey was claiming. The day after Limbaugh touted McCaughey's commentary, Wall Street Journal senior economics writer Stephen Moore and Fox News anchors Bill Hemmer and Megyn Kelly promoted the same falsehood, with Moore crediting Limbaugh for bringing it to his attention. Limbaugh subsequently took credit for spreading this story, saying during the February 10 edition of his radio show: “Betsy McCaughey writing at Bloomberg, I found it. I detailed it for you, and now it's all over mainstream media. Well, it's -- it headlined Drudge for a while last night and today. Fox News is talking about it.”

Transcript

From the October 29 broadcast of Premiere Radio Networks' The Rush Limbaugh Show:

LIMBAUGH: From the new House bill. I've got a couple of passages from it here, the thing Pelosi announced today. It's -- I wanna read it to you just to show you what we're going to be dealing with. Now, as I go through this, it -- this section I'm gonna read part of, it looks like small businesses are gonna lose their tax breaks for health coverage. Right now, small business gets a tax break for providing health coverage. It's gonna be -- it looks like it's gonna be phased out in two years. But it's hard to tell from the damn convoluted language. “For purposes of section 38” -- by the -- section 45r, small business employee health coverage credit.

“For purposes of section 38, in the case of a qualified small employer, the small business employee health coverage credit determined under this section for the taxable year is an amount equal to the applicable percentage of the qualified employee health coverage expenses of such employer for such taxable year.

”For purposes of this section, the applicable percentage is 50 percent.

“In the case of an employer whose average annual employee compensation for the taxable year exceeds $20,000, the percentage specified in paragraph (1) shall be reduced by a number of percentage points which bears the same ratio to 50 as such excess bears to $20,000.

Now, you with me?

”Phased -- phaseout based on employer size. In the case of an employer who employs more than 10 qualified empl" --

What the f-- what is a qualif -- jeez. Good Lord.

“In the case of an employer who employs more than 10 qualified employees during the taxable year, the credit determined under subsection (a) shall be reduced by an amount which bears the same ratio to the amount of such credit (determined without regard to this paragraph and after the application of the other provisions of this section) as (A) the excess of six -- the number of qualified employees employed by the employer during the taxable year, over 10 years to 15.

”Credit not allowed with respect to certainly highly compensated employees. No credit shall be determined under subsection (a) with respect to qualified employee health coverage expenses paid or incurred with respect to any employee for any taxable year if the aggregate compensation paid by the employer to such employee during such taxable year exceeds $80,000."

How's that hope and change working out for you?

Zachary Pleat is an intern at Media Matters for America.