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Allows self-employed individuals to deduct the 15.3% Medicare and Social Security tax that they currently pay on the cost of their health insurance. Currently all business entities except the more than 20 million sole proprietors are able to deduct their health premiums as a business expense and forego FICA taxes on these expenses. |
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CAHC Position
CAHC supports this legislation to create tax equity and make health insurance more affordable to self-employed individuals. Micro-businesses are the economic engine of our society and create new services, products, and opportunities for Americans. Yet, many entrepreneurs put their life savings on the line to start a new business and find health insurance premiums are too costly to afford. Certainly this group should not be singled out to pay Social Security and Medicare taxes on health insurance premium payments, particularly when this is not required of any other business entity. Changing this inequity could save small businesses more than $1500 per year to cover their families -- a very significant amount for sole proprietors.
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