CALIFORNIA HEALTH CARE REFORM
As business owners and as women, we are concerned about and invested in the well-being of our employees and their families. We care deeply about health care reform -- an issue that impacts business, public policy and overall quality of life in a state that represents the 8th largest economy in the world. As the leading organization in Southern California representing women-owned businesses of all sizes and in all industries, we think it is critical that NAWBO-LA be actively engaged in the development of a solution that is as well-considered as the issue is complex.
Individuals Covered: Any truly complete and comprehensive solution will ultimately have to cover all Californians, but it is our view that it is not a "non-starter" if a first effort does not begin there. That being said, we will also have to accept that incremental change will result, at best, in incremental improvement.
Individual/Employer Mandates: Everyone needs to be part of the solution. California is "our house" and the extent of the crisis requires that everyone -- individuals, employers, insurers, government and the health care industry -- step up and help put this house in order.
Insurance Reforms, Cost Containment & Financing: Any solution to the state's health care crisis must also aggressively address insurance market reforms, cost containment measures and financing mechanisms that, while fair and equitable, take into consideration the ultimate engine that market-driven health care reform -- together with a modicum of government regulation -- represents within a vibrant and competitive economic environment.
According to the U.S. Census Bureau, almost 44 million Americans do not have health insurance coverage. The National Women’s Business Council estimates that women-owned firms employ 7.3 million of these uninsured people.
Cost is the key factor for women and small business owners in deciding whether to purchase health insurance. The 2002 annual survey by the Kaiser Family Foundation found that 84% of the small firm employers who do not offer these benefits cited the high cost of premiums as a very important factor in their decision.
Insurers charge small firms more per employee for health insurance than they charge large firms. Health insurance premiums for all businesses increased by 12.7% in 2002. At the same time, however, premiums for firms with between 10 and 500 employees rose 18.1%.
In early January 2008, NAWBO announced its criticism of the proposed rules issued by the Small Business Administration for the women owned business set-aside program.
In 1994, Congressional legislation mandated that 5% of government contracts go to women-owned businesses. To help meet this goal, a set-aside program for women-owned businesses was established in 2000. Currently, only 3% of federal contracts go to women-owned businesses. NAWBO is strongly advocating raising that number to the 5% minimum established in 1994.
Why It Matters:
Doing business with the government is an important step in the growth of a business. If women business owners had received 5% of the $277.5 billion spent by the federal government with prime contractors in FY 2003, they would have received $13.68 billion in contracts. That's $4.9 billion more than they actually received. Meeting the 5% procurement goal will help women business owners achieve greater success.
NAWBO supports fair and equitable tax policy for large and small businesses that fosters the economic growth of women-owned and other small businesses. Legislation should be enacted to ensure tax equity and basic fairness for all forms of small business organizations. The privilege of deducting legitimate business expenses should no longer be based upon the entity chosen to operate the business.
Business meals and entertainment: Small businesses typically rely on close personal relationships and customer service to compete for sales rather than expensive advertising campaigns that are 100% deductible; and small business expenditures for meals and entertainment are an important part of the marketing effort. Currently only 50% of such expenditures are deductible. NAWBO supports legislation that provides small business with relief in this area. An immediate small business tax deduction for 100% of the meals and entertainment expenses is optimal.
Fringe benefits: NAWBO supports the position that, if the payments of all fringe benefits are deductions to the C Corporation and exclusions from the taxable compensation of the C Corp owner-employee, then all such benefits should be excluded from the income of the non-C Corp owner as well.
Home office deductions: The current home office deduction is difficult to qualify for in terms of space use of the home and activities conducted there. The calculation of the amount of the deduction is time consuming and complex. NAWBO supports the greater of a standard home office deduction, allowing home-based small business owners to deduct the costs of office, storage, studio, and retail space in their homes, regardless of whether customers physically visit or revenue is produced there.
Estate (death) tax: The “death” tax creates a disincentive to expand a business, create jobs, and invest in capital equipment. The estate tax is a form of double taxation since profits and earnings have already been taxed once when income taxes were paid. NAWBO supports estate tax reform provisions as it relates to family-owned and small businesses and encourages Congress to address the sunset provisions of The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) to remove the uncertainty of estate planning.