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WASHINGTON - Federal legislation cosponsored by Congressman Tom Petri (R-WI) would give Wisconsin’s 340,015 self-employed individuals better access to affordable health-care coverage, ending a significant double-digit disparity in premium rates that has contributed to the nation’s health-care crisis. The Equity for Our Nation’s Self-Employed Act (H.R. 3660) would eliminate the cost penalties in health insurance imposed on sole proprietors and make quality health care more affordable for Americans who make up the majority of the working uninsured.
In the nation’s current health-care crisis, the self-employed have been hit particularly hard, facing rising costs of health care combined with laws that require these business owners to pay 15.3 percent in self-employment (Medicare and Social Security) taxes on their health insurance premiums. This segment -- comprised of the smallest business owners -- is the only group of American workers that bears this tax burden.
"So much of America's business vitality depends on the entrepreneurship of self-employed people," said Petri. "It's in the nation's interest as well as the interest of simple justice that these important individuals be treated fairly by the tax code, and be encouraged to get the health insurance they need. That's why I'm supporting this bill."
According to Robert Hughes, president of the National Association for the Self-Employed and a CPA, studies have indicated that on average in the United States a self-employed individual pays $11,480 annually in health insurance premiums for family coverage. Since owners are unable to deduct their premiums as a business expense, as all other businesses do, they have a higher self-employment (FICA) tax liability. In this case a sole proprietor would be paying an additional $1,766.44 (15.3 percent) in taxes. The Equity for Our Nation’s Self-Employed Act (H.R. 3660) addresses this inequity and levels the playing field for over 20 million sole proprietors.
“Millions of self-employed individuals in Wisconsin live the American dream every day by running their own business, being their own boss and supporting the national economy," said Hughes. “But while the self-employed have invested tremendous sweat-equity as key contributors to the economy and society, they face a remarkably unfair playing field behind the scenes when it comes to the tax code and health care.”
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