12/17/2007
CONTACT: John Kabateck or Michelle Orrock, 916-448-9904
SACRAMENTO, Calif. -- The National Federation of Independent Business/California issued the following statement about the health care reform proposal agreement expected to pass the California State Assembly later today:
"By advancing the largest single tax increase in California history, the governor and Legislature propose shutting down the life support system of our state's already-struggling small-business community," said John Kabateck, executive director of NFIB/California. "A 6.5 percent payroll tax on California's largest job creator will force businesses to pay billions of dollars in new taxes, cause hundreds of thousands of jobs to be lost and undermine California's fragile economy. Employers will have no choice but to issue pink slips, leave positions vacant, or, worst of all, shut their doors forever.
"Why on earth are our state leaders proposing a program with a $14 billion price tag as they prepare to declare a fiscal emergency in response to a projected budget deficit of, coincidentally, the same amount? Unlike many of our elected officials, small-business owners know that you cannot tax yourself out of a fiscal hole. The first step to climbing out holes is to stop digging."
"California already has the worst business tax environment, and adding an additional burden to small businesses will only make that reputation worse. Small businesses are California's job-creating engines, and earlier studies indicate that health care mandates could cost California hundreds of thousands of jobs, hitting small businesses the hardest.
"AB 1X does nothing to control health care costs, and with health care normally costing more than 13 percent of payroll, a massive new government program will be underfunded and add pressure to a state budget already facing a $14 billion. In addition, employer mandates violate federal law, rendering AB 1X illegal, as it imposes an employer mandate."
