Research Briefing

Job Creators, Large And Small, Start Planning Layoffs And Warn Customers Of Higher Prices To Come

DENVER POST EDITORIAL: “Instead Of Acknowledging That Top-Down Economic Planning Usually Brings With It Some Unintended Costs, Rep. Henry Waxman, D-Calif., Immediately Politicized The News By Attacking Industry.” (Editorial, “Health Care Hit Didn’t Take Long, The Denver Post, 3/31/10)

DESPITE ATTACKS FROM DEMS, JOB CREATORS CONTINUE TO INFORM AMERICANS ABOUT COSTS OF OBAMA’S GOVERNMENT-RUN HEALTH CARE BILL

Boeing Expects To Have A $150 Million Charge In First Quarter As A Result of Health Care Bill.  “Boeing today announced that it expects to recognize an income tax charge of approximately $150 million as a result of the recently enacted Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act. … The charge is expected to reduce net earnings by approximately $150 million, or $0.20 per share, in the first quarter of 2010 as an increase to income tax expense and a reduction to the deferred income tax asset. Cash impacts of this charge will be realized over many years beginning in 2013.” (“Boeing To Recognize Charge Associated With Health Care Law,” CNBC, 3/31/10)

Illinois Tool Works, Inc. Reports Cost Of $22 Million From Health Care Bill. “Illinois Tool Works Inc. (NYSE: ITW) today announced that as a result of certain provisions in the recently enacted Patient Protection and Affordable Health Care program, future Medicare prescription drug subsidies received by the Company for retiree prescription drug coverage will now be taxable. As a result, the Company expects to record a discrete tax adjustment of $22 million, or 4 cents of diluted income per share from continuing operations, in its 2010 first quarter results to reflect this change in tax treatment.” (Illinois Tool Works, “ITW Announces A Revision To First Quarter 2010 Earnings Forecast Due To Recently Enacted Health Care Legislation,” News Release, 3/30/10)

AND SMALL BUSINESSES ARE EITHER FREEZING HIRING, PLANNING JOB CUTS

OR RAISING PRICES

Maine Concrete Business Cut Back 100 Employees, Might Not Rehire More Than 25 To Avoid Mandate. “Such penalties make Doug Newman, owner of Newman Concrete Services in Richmond, Maine, nervous. In the past 18 months, as the economy battered the construction industry, Newman’s work force shrunk from 125 employees to just 25. He is worried that once the economy turns and he begins to hire back workers, he’ll face a critical decision when he nears the 50-worker mark and is no longer exempt from penalties. Newman now pays 60 percent of his employees’ individual premiums and 40 percent of their family premiums. ‘The 51st employee could mean $100,000 in costs. I’ve been calling it the concrete ceiling,’ he said. ‘No employer is going to hire No. 51 if it brings all these mandates down on you, because they’re pretty onerous.’” (Steve LeBlanc, “Small Businesses Fret Over Details Of Health Law,” The Associated Press, 3/31/10)

Small Business Owner In Texas Says Health Care Bill Will Cause A Lot Of Small Businesses To Have To Close. “Don Day is also worried. Day owns eight small businesses in McKinney, Texas, including two restaurants, a boutique hotel and several retail shops. Although he employs 125 workers, he offers health care for just a few key employees. Just an extra $200 a month per employee for health care could set him back hundreds of thousands of dollars a year , a cost he can’t afford. ‘It’s not just me, it’s every small business across this land,’ he said. ‘A lot of small businesses are going to go out of business.’” (Steve LeBlanc, “Small Businesses Fret Over Details Of Health Law,” The Associated Press, 3/31/10)

Tanning Salon Owner In Iowa Said Many Of Her Customers Don’t Know About The Tax And Questions If They’ll Want To Pay More To Tan. “Owners of salons such as Siren Tan in West Des Moines said are not happy about it. … ‘I think it’s sad the government comes in and tells my customers they are going to be charged more if they chose to look good,’ said Jody Wilson, owner of Siren Tan. Wilson says most of her customers don’t know about the new tanning tax and she’s concerned about whether they will want to pay an extra $3 for a typical $30 tanning session.” (“Tanning Tax Burns Salon Owners,” KCCI-TV, 3/30/10)

Tanning Salon Owner In Michigan Says Tanning Tax Will Force Her To “Take The Hit… To Keep [Her] Customers.” “Increased costs during a recession will make it very difficult to stay in business, one salon owner told 24 Hour News 8. … Her salon already has had to lower its prices because of the downturn in the economy, DeVries said. Now, with a 10 percent excise tax on indoor tanning services, or the ‘tan tax,’ just a few months away, she will have to make some tough decisions to keep her dream alive. … ‘It’s going to affect us as business owners because we’ll take the hit because we have to lower our prices again to keep our customers.’” (Dani Carlson, “10 Percent Tanning Tax To Start July 1,” WOOD-TV, 3/29/10)

Owner Of Tanning Salon In West Virginia Says Tanning Tax Will “Drive Away” Customers. “Hundreds of small business owners across the state could end up closing their doors due to the new Health Care Reform Law. Kim Wherley opened “Lion in the Sun” tanning salon 17 years ago in Fairmont. Since then she’s opened two more locations in Marion County. But she’s seriously concerned about the ‘tan tax’ that’s part of the new law. … What does it mean in real dollars and cents? Wherley charges around $50 for a monthly, unlimited tanning package. Add on the tan tax and it comes to about an $8 increase. She believes it will drive away many customers already pinching pennies because of the recession. ‘I don’t think it’s going to raise what they projected it’s going to,’ she predicted. ‘It’s going to cost our community, other communities, jobs and tax revenues.’” (“Tan Tax Reax,” West Virginia Metro News, 3/30/10)