Employing about half of our nation's private sector workforce and creating 65% of net new jobs, small businesses are the engines which will kick-start our economy and get our neighbors back to work. Frequently, I have the opportunity to meet with small business owners in our community regarding hurdles they see to expanding their businesses and their payrolls. For many employers who offer health care for their employees, the rising cost of coverage has been an ever growing challenge to staying afloat during these trying economic times.
Today, the House Ways and Means Committee held a hearing to examine the implementation of the Small Business Health Insurance Tax Credit (SBTC), and whether it is effective in reducing costs for employers. First enacted as a part of the President's health care law, the credit was supposed to be a way to help small businesses access affordable insurance to cover their employees.
Yet, two years later, we've heard from our nation's small businesses that the tax credit is a convoluted process which only 8% of small businesses have been able to utilize. Small businesses must allocate resources to undertake complicated calculations in determining whether they even qualify for the credit, and to tackle extensive instruction and application forms. If job creators are able to navigate the calculations and confirm they are indeed eligible for the credit, they are required to follow employee compensation and hiring rules in order to keep it.
During the hearing this morning, I had the chance to question Treasury Inspector General for Tax Administration, J. Russell George, and IRS Commissioner, Tax Exempt & Government Entities Division, Sarah Ingram, on the challenges facing American small businesses with respect to the SBTC.
I will continue to work with my colleagues to ensure our nation's small businesses have all the tools they need to succeed.