Thomas Daschle: “I have long been aware of an inequity imposed on small businesses in our Federal Tax Code. Our tax system discriminates…”

“I have long been aware of an inequity imposed on small businesses in our Federal Tax Code. Our tax system discriminates against small businesses by denying the self-employed a full deduction for the expenses they incur to obtain health insurance for themselves and their families. Corporations may deduct 100 percent of the costs of providing health insurance for their employees, but the self-employed, whether they operate as sole proprietorships or as partnerships, have been permitted to deduct only 25 percent of the cost of health insurance for themselves and their families. Furthermore, the 25 percent deduction has been extended on a piecemeal basis only and last expired on December 31, 1993. Unless we reinstate the deduction, the self-employed, most of whom are hard-working middle-income taxpayers, will have to shoulder the full cost of their health insurance or forgo health insurance altogether. The importance of the deduction has grown substantially in recent years due to tremendous increases in health care costs generally.”