Video: NY small business owner on expansion, job creation: “It’s just not worth it”

posted at 2:01 pm on February 27, 2014 by Ed Morrissey

Quick — someone check to see if the Koch Brothers have bought Time Warner Cable News! Harry Reid needs to know, after all, because all of these “horror stories” about ObamaCare are just lies. Actually, we may need to see if the Kochs have bought all of New York, because small-business owners are discovering that Reid’s law does anything but “bend the cost curve downward” (via Daniel Halper):

“Everything is on hold. We won’t grow. We won’t reach that threshold. It is not worth it for us,” says pet store owner Matt Sames.

The reporter adds, “He says he scrapped his plans because of the Affordable Care Act. Opening two more locations would increase his company’s employee size to 50, making it mandatory for him to provide health care for all his workers.”

“If we wouldn’t cover those 50 employees, I think there’s a $2,000 penalty per employee. So that is a $100,000 bill,” says the owner.

Yes, that’s what happens when one does the math on ObamaCare’s employer mandate. We’ve made this argument a number of times since the debate first began on this part of the ACA. In order for small businesses to grow past the 50-employee mark, the return on that staffing investment has to exceed not just the base compensation of those employees (as it always must), but also the added costs of either health insurance or a penalty for each existing employee as well. That provides a huge disincentive to expansion, so it’s hardly surprising that business owners are choosing to avoid the risks of expansion and job creation altogether and staying put at current size.

The rest of the small business owners in the clip are making the same point. The costs outweigh the risks in expansion now, so they’re not expanding. That means the economy won’t grow, jobs won’t be created, and investors will look for ways to protect their capital rather than put it to use. These are some of the same disincentives noted by the CBO in its projection that ObamaCare will result in a net decline of the equivalent of 2.5 million full-time jobs from what would have existed without the law over the next decade, which will result in a net decline of a trillion dollars in compensation.

This is the real job lock — the lock on innovation and expansion thanks to the heavy cost overhang of ObamaCare on small businesses, and business in general. But don’t tell Harry Reid, because math is un-American.

Update: More on Reid from my friend Peter Wehner at Commentary: “At least Joe McCarthy wasn’t majority leader.” Be sure to read it all, and then wait to see if the media covers Reid’s demagoguery with anything close to the same energy as the Ted Nugent story.


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Reality…

Seven Percent Solution on February 27, 2014 at 2:03 PM

Who you going to believe?

Reality or that lying pederast Harry Reid?

PolAgnostic on February 27, 2014 at 2:04 PM

Reality…

Seven Percent Solution on February 27, 2014 at 2:03 PM

Who you going to believe?

Reality or that lying pederast Harry Reid?

PolAgnostic on February 27, 2014 at 2:04 PM

.
In an earlier life, I was The Amazing Karnak

PolAgnostic on February 27, 2014 at 2:05 PM

Not going to hold my breath….. lsm has Harry’s back

cmsinaz on February 27, 2014 at 2:07 PM

Atlas: (shrugs)

Red Cloud on February 27, 2014 at 2:07 PM

and then wait to see if the media covers Reid’s demagoguery with anything close to the same energy as the Ted Nugent story.

Only at gun point.

sentinelrules on February 27, 2014 at 2:07 PM

Atlas: (shrugs)

Red Cloud on February 27, 2014 at 2:07 PM

Stop shrugging, shrugger….

(Warm Bodies quote for those who haven’t seen the movie)

dentarthurdent on February 27, 2014 at 2:09 PM

This is the real job lock — the lock on innovation and expansion thanks to the heavy cost overhang of ObamaCare on small businesses, and business in general. But don’t tell Harry Reid, because math is un-American.

heh

workingclass artist on February 27, 2014 at 2:09 PM

Obama and his bright-ass touch.

Shy Guy on February 27, 2014 at 2:09 PM

Ask them if they voted for any of the demorats currently in office; a blue state citizen always needs to have their vote verified before accepting their tale of woe.

Bishop on February 27, 2014 at 2:10 PM

Obama and his bright-ass touch.

Shy Guy on February 27, 2014 at 2:09 PM

Hmmm – I thought it was half-vast, but that works too…

dentarthurdent on February 27, 2014 at 2:11 PM

Last Friday was the anniv. of the communist manifesto.

Non-workers unite” is their new credo.

Get with the program, rubes.

Schadenfreude on February 27, 2014 at 2:14 PM

Be sure to read it all…

Sorry, with an opening like this, I couldn’t.

The other day I was highly critical of Republicans for not being more vocal in their criticisms of the repulsive comments by rock guitarist Ted Nugent.

cozmo on February 27, 2014 at 2:14 PM

These politicians I vote for (year after year, after year…)

are enacting Laws that are punative to me and my Family.

But I will continue to Vote for them… because they’re
for the little Guy.

ToddPA on February 27, 2014 at 2:15 PM

yes, but in a socialistic society, it is your patriotic duty to expand and grow for the common good. Your concerns for capitalistic profits are no longer tolerated. You need to get with the program, or we will have to find a reeducation camp for you.

Techster64 on February 27, 2014 at 2:17 PM

No, Mr. Economy. I expect you to die.

- Baurich Crapfinger

Cicero43 on February 27, 2014 at 2:19 PM

It’s going exactly as obama and his goons want it.

The destruction is highly successful.

Schadenfreude on February 27, 2014 at 2:22 PM

Who you going to believe?

Reality or that lying pederast Harry Reid?

PolAgnostic on February 27, 2014 at 2:04 PM

Has Dingy ever addressed the common charges of Pederasty?

slickwillie2001 on February 27, 2014 at 2:24 PM

The rest of the small business owners in the clip are making the same point. The costs outweigh the risks in expansion now, so they’re not expanding. That means the economy won’t grow, jobs won’t be created, and investors will look for ways to protect their capital rather than put it to use. These are some of the same disincentives noted by the CBO in its projection that ObamaCare will result in a net decline of the equivalent of 2.5 million full-time jobs from what would have existed without the law over the next decade, which will result in a net decline of a trillion dollars in compensation.

Jaw-dropping response to precisely this critique of Obamacare made at a dinner party the other night:

“Well, Obamacare isn’t making employers do this. That’s their decision.”

As if, given what Obamacare will do to them if they don’t make that decision, there’s any other rational decision to make. The left has completely checked out of reality.

de rigueur on February 27, 2014 at 2:30 PM

Not everyone is hurting from a tough economy.
http://msn.foxsports.com/nfl/story/incognito-smashes-his-ferarri-with-baseball-bat-cops-reportedly-say-022714

butch on February 27, 2014 at 2:30 PM

Relax. All he has to do is set up a sham fake gay marriage with a business partner and that guy can keep the new assets under his name so that, technically, they can run different businesses and evade to 50 employee mandate for employer insurance coverage.

FrankT on February 27, 2014 at 2:31 PM

“He says he scrapped his plans because of the Affordable Care Act. Opening two more locations would increase his company’s employee size to 50, making it mandatory for him to provide health care for all his workers.”

But can he get gay wedding cake if he were a homosexual? Priorities people!

Seriously, Harry Reid aside people understand that Obamacare is a job killer. This should come as no surprise to anybody.

Happy Nomad on February 27, 2014 at 2:38 PM

If leftists weren’t stupid and/or dishonest, they wouldn’t be leftists.

Unless of course they are dedicated Marxist totalitarians.

Naturally, the small businesses most adversely affected will be those ALREADY above the 50-employee threshold by too much to adjust to 29-hour work weeks. They don’t have the option of not expanding, they are just screwed. Some will go out of business.

This was discussed, you may recall, some years ago. Remember Saint Hillary’s response: “I can’t be responsible for every undercapitalized small business in America.”

Bigger business are going to find the same problem. For many, paying the fines and dumping their employees into the exchanges will be the only option. That will be bad for the employees – but is just the ticket the exchanges need, since most of those workers are relatively healthy.

Adjoran on February 27, 2014 at 2:39 PM

I fail to see the problem?

Less jobs is a good thing. You see, it allows people who would otherwise be working the chance to stay home and be with their family more. It’s about choice./

jjjdad on February 27, 2014 at 2:45 PM

Ask them if they voted for any of the demorats currently in office; a blue state citizen always needs to have their vote verified before accepting their tale of woe.

Bishop on February 27, 2014 at 2:10 PM

Just because he’s from a blue state doesn’t mean that he’s thrown on the onesie and held an Obamacare enrollment slumber party. But you make a good point. Coumo told conservatives to get the hell out of his state- like the ethnic cleansing of Indians back in the 1830s. If he isn’t some liberal, why the hell is he still in Andy’s personal kingdom?

Which, BTW, is the really funny part of this story. I keep seeing the ads about how business friendly NY is to companies that want to relocate or expand. And here we have this guy who was planning to do so up until Obamacare came about.

Happy Nomad on February 27, 2014 at 2:46 PM

The rumor that Reid is an actual human being is a vast lie. That tool is the most despicable excuse for an American in Senate history. He REALLY does not give a flip whether this country survives, or not. Political expediency rules all. Reid, yer room is ready in Hell…

vnvet on February 27, 2014 at 2:46 PM

Hey! If the guy won’t expand, then just think of all those folks who DID NOT get hired! They’re “free” to pursue their muse. Maybe become a song writer. A painter. A musician.

GarandFan on February 27, 2014 at 2:59 PM

Mr. Sames, the IRS is on line one. They’d like to discuss an urgent matter with you….

mogilla on February 27, 2014 at 3:03 PM

No problem:

Let’s pass a law forcing companies to grow no matter what.

There…fixed!

brentspolemics on February 27, 2014 at 3:37 PM

Opening two more locations would increase his company’s employee size to 50, making it mandatory for him to provide health care for all his workers.”

We are copying France, they have similar laws, in reaction the entrepreneurs have many small businesses to avoid the government mandates instead of a single more efficient larger business.

RJL on February 27, 2014 at 3:42 PM

To better understand the penalty go here http://www.ltgov.ri.gov/smallbusiness/employerprovisions.pdf

Here is a summary and the employer in thus article would pay a $40,000 penalty and not a $100,000. 50 employees minus floor of 30 employees—-((50-30=20)*$2,000=$40,000))

Scenario A
The large employer does not offer coverage, but no full-time employees receive credits for
exchange coverage. No penalty would be assessed.

Scenario B
The large employer does not offer coverage, and one or more full-time employees receive credits
for exchange coverage. The annual penalty calculation is simply the number of full-time
employees minus 30, times $2,000. In this example (i.e., 50 full-time employees), the penalty
would not vary if only one employee or all 50 employees received the credit; the employer’s
annual penalty in 2014 would be (50-30) x $2,000, or $40,000.

Scenario C
The employer offers coverage and no full-time employees receive credits for exchange coverage.
No penalty would be assessed.
11 §1511 of PPACA.
12 Table 2 shows calculations for penalties on these employers in 2014 on an annual basis, rather than a monthly basis
as described above.
13 Because the calculation of “large employer” includes part-time workers, but the penalty is only calculated based on
full-time workers, not all large employers who have a full-time employee receiving a credit would actually pay a
penalty. This could occur because the first 30 workers are not counted. For example, an employer with 100 part-time
workers (15 hours per week) and 30 full-time workers (30+ hours per week) would be considered a large employer
with 80 full-time equivalent workers. Even if one or more workers received a premium credit, the penalty would only
be assessed against the number of full-time workers (30-30) x $2,000 = 0.
.
Summary of Potential Employer Penalties Under PPACA
Congressional Research Service

Scenario D
The employer offers coverage, but one or more full-time employees receive credits for exchange
coverage. The number of full-time employees receiving the credit is used in the penalty
calculation for an employer that offers coverage. The annual penalty is the lesser of the following:
• the number of full-time employees minus 30, multiplied by $2,000—or $40,000
for the employer with 50 full-time employees (i.e., 50 minus 30, multiplied by
$2,000), or
• the number of full-time employees who receive credits for exchange coverage,
multiplied by $3,000.
Although the penalties are assessed on a monthly basis (with the dollar amounts above then
divided by 12), this example uses annual amounts, assuming the number of affected employees is
the same throughout the year.
If the employer with 50 full-time employees had 10 full-time employees who received premium
credits, then the potential annual penalty on the employer for those individuals would be $30,000.
Because this is less than the overall limitation for this employer of $40,000, the employer penalty
in this example would be $30,000.
However, if the employer with 50 full-time employees had 30 full-time employees who received
premium credits, then the potential annual penalty on the employer for those individuals would be
$90,000. Because $90,000 exceeds this employer’s overall limitation of $40,000, the employer
penalty in this example would be limited to $40,000.

HonestLib on February 27, 2014 at 3:44 PM

HonestLib on February 27, 2014 at 3:44 PM

Better yet – how about we get the gubmint the he11 out of it, and let the employer decide what benefits he can provide solely based HIS trade-off of cost versus what he needs to provide in order to get good employees – i.e. – let the labor market work without gubmint interference.

dentarthurdent on February 27, 2014 at 3:50 PM

If the donks get the HOR back in 14 we will see new laws that require businesses to expand even if they lose money and doctors to accept patients that they lose money on. Because every small business owner and doctor have a pool filled with gold coins like Scrouge McDuck.

I truly believe their child like minds think that is true.

jukin3 on February 27, 2014 at 3:59 PM

No problem. Businesses that won’t expand will just face confiscatory levels of taxation and ‘contributions’ to the progressive plans they are trying to avoid being bankrupted by, thereby being…bankrupted by progressives.

It’s just other people’s money that should be given to the government!

xNavigator on February 27, 2014 at 4:02 PM

I have just started watching this news station (TWC) two days ago and I have been pleasantly surprised.

mjbrooks3 on February 27, 2014 at 4:07 PM

dentarthurdent on February 27, 2014 at 3:50 PM

Sir, we agree on this and I have posted quite often that I have always been against The ACA. I have been at 49 employees for a while because I was afraid of a look back rule to catch us that dropped below 50 for financial reasons.

One thing to discuss single payer, but no discussion from me about The ACA; other than it being the worst bill in my lifetime. On single payer type insurance……worked in the UK and scheduled my trips home to get medical care from my stateside doctors. My posts are to long, but you get my honest drift I hope.

HonestLib on February 27, 2014 at 4:14 PM

HonestLib on February 27, 2014 at 4:14 PM

honestly I never even thought of a retro-reaction so good thing you did as it would not surprise me.

dmacleo on February 27, 2014 at 4:19 PM

No problem. Businesses that won’t expand will just face confiscatory levels of taxation and ‘contributions’ to the progressive plans they are trying to avoid being bankrupted by, thereby being…bankrupted by progressives.

It’s just other people’s money that should be given to the government!

xNavigator on February 27, 2014 at 4:02 PM

Point taken. The average AGI for the top 1% is $382,000 and averages around 1.4 million taxpayers a year. Those below the average tend to be small business owners and with federal (including FICA) and state taxes they are paying a 42% (ETR). Those above the average pay less in taxes because their income is usually taxed as capital gains and they have more flexibility to live in states with no income taxes. Their ETR (effected Tax Rate) is around 18% to 22%. Any increase in the MTR (marginal tax rate) affects us small business owners and those in the top of the 1% feel little to no pain.

Now, one way to lower my ETR, “WOULD” be to hire my kids and shift my income to their lower MTR…..IF I was supporting them. Naw, I would never do that and have them purchase non traceable asset type things that I need. No I would never do that…..just yapping away.

HonestLib on February 27, 2014 at 4:35 PM

dmacleo on February 27, 2014 at 4:19 PM

I’m old and seen almost there is to see when it comes to the Government and their view on my income! Worked for CPA firms for many years….a long time ago…and there have been many type of look back rules you have to tax plan around.

HonestLib on February 27, 2014 at 4:38 PM

the employer penalty in this example would be limited to $40,000.

HonestLib on February 27, 2014 at 3:44 PM

Even so, $40,000 per year is a lot for a small business. It’s over $3,300 a month and nothing short of a shakedown. I guess you could look at is as “protection money”. You know a little cash to keep the Chicago Thugs at bay. NY is already an extremely hostile climate for business, (those commercials trying to entice businesses to NY are a joke)he already pays the highest taxes in the entire nation but funding a socialist utopia is expensive and someone has to pay.

Buttercup on February 27, 2014 at 4:42 PM

Thank an Obungler voter today for the lack of jobs …

Whitey Ford on February 27, 2014 at 4:46 PM

Even so, $40,000 per year is a lot for a small business. It’s over $3,300 a month and nothing short of a shakedown. I guess you could look at is as “protection money”. You know a little cash to keep the Chicago Thugs at bay. NY is already an extremely hostile climate for business, (those commercials trying to entice businesses to NY are a joke)he already pays the highest taxes in the entire nation but funding a socialist utopia is expensive and someone has to pay.

Buttercup on February 27, 2014 at 4:42 PM

Thank you for pointing that out as I agree. Sorry if it appeared that $40,000 was chump change cause $40K is a LOT to me.

HonestLib on February 27, 2014 at 4:52 PM

Is anyone else a little unnerved by how red this guys face looks in the stillshot?

Maybe he’s allergic to pets, and is in the wrong business.

I do have respect for anyone that owns and operates a small business. Lots of hard choices that have to be made along with the daily decisions & direction needed.

Hat’s off to you, Mr Redface.

Effay5 on February 27, 2014 at 4:55 PM

Is anyone else a little unnerved by how red this guys face looks in the stillshot?

Maybe he’s allergic to pets, and is in the wrong business.

I do have respect for anyone that owns and operates a small business. Lots of hard choices that have to be made along with the daily decisions & direction needed.

Hat’s off to you, Mr Redface.

Effay5 on February 27, 2014 at 4:55 PM

We all look that way from time to time. Early this morning had a project manager say something related the to the trial in Florida (if you get my meaning) to a tech, at the client’s place of business, and been in damage control since 6:30 am. Am home now and I have high BP and took it a few minutes ago and it was 155/130. Some days it’s your time to be in the barrel. Heck, I’m too old for this stuff, but ain’t got nothing else to do!!!

HonestLib on February 27, 2014 at 5:06 PM

Has Dingy ever addressed the common charges of Pederasty?

slickwillie2001 on February 27, 2014 at 2:24 PM

I don’t think so, but he’s been seen many tmes, with young boys, at the Cowboy Poetry Festival.
No wonder he got the funds for it.

Sgt Stryker on February 27, 2014 at 5:21 PM

We can be angry, but obama is achieving his sought-after destruction of our once-great America.

GaltBlvnAtty on February 27, 2014 at 5:23 PM

Having a business in New York State is tough all around; something that many are not aware of is the States mandate on estimated taxes to be paid three month in advance. If you underestimate you are fined by the State, if you over pay you can claim it on your taxes at tax time. Your car license plates are now billed for two years.

mixplix on February 28, 2014 at 8:39 AM

That’s estimated sales taxes.

mixplix on February 28, 2014 at 8:40 AM

Hey! If the guy won’t expand, then just think of all those folks who DID NOT get hired! They’re “free” to pursue their muse. Maybe become a song writer. A painter. A musician.

GarandFan on February 27, 2014 at 2:59 PM

…or cowboy poet.

dominigan on February 28, 2014 at 2:35 PM