Sign up for The Media Today, CJRâs daily newsletter.
One of the best stories Iâve seen in the post-health reform media era comes from the Boston Globe. Health reporter Kay Lazar held a microscope to the much-touted small business tax credit and found a lot of little loopholes that cast doubt on the usefulness of the credit for many small firms in the Bay State. This is important, since, as Campaign Desk has pointed out, the little guys up there are suffering. Theyâve experienced double digit rate increases and arguably got the short end of the stick in the stateâs health reform law.
Lazarâs story was short but comprehensive, and shows what good reporters can doâeven in a tight spaceâif they know what they are looking for. Through the eyes of the Capobianco family, which owns an automotive shop in Hyde Park, she told readers how the family eagerly anticipated the new tax credit because, as Marcia Capobianco, the firmâs bookkeeper, put it, âI have been going frantic trying to figure out what I am going to do about health insurance.â
She soon discovered the governmentâs escape hatch, which, of course, limits what it will spend on subsidies. The law says that family-owned businesses cannot count employees who are family members in determining the credit. That means the automotive firm with four workers has only one who is not a family member. The bottom line: the $3,800 annual credit they were expecting now amounts to less than $1,000. âI guess weâre just peons,â Capobianco told the Globe.
Lazar did some digging. She called the Treasury Department in Washington and found that family members are generally excluded from business tax credit programs to âensure fairness with respect to nonrelated taxpayers⌠to protect the integrity of the system and prevent abuse.â Abuse? Integrity? Why, neither the president nor the pols talked about abuse when this provision was being crafted. Their message was about helping the little guy.
Lazar also discovered that the White House was less than forthcoming about the limitations of the credit that it has been promoting to win support from small businesses. âInformation on the exemption can be hard to find,â she reported. It was not included in a White House âFact Sheetâ released April 1 soon after the bill was signed; on an IRS âFrequently Asked Questionsâ bulletin, the problem is addressed as answer number fourteen in a twenty-two-item release. The bulletin reveals that family members of a business owner or the ownerâs partner are not considered employees for purposes of obtaining the credit.
Even Jon Hurst, president of the Retailers Association of Massachusetts, did not know about the family exemption. Hurst represents the stateâs small businesses, but apparently the governmentâs PR initiatives didnât include informing such folks.
Lazar also interviewed a Massachusetts business consultant, who advises many small firms. He told her that the administration had used examples showing how the formula for calculating the credit would work, but that calculation did not mention the exclusion of family members.
As the administration begins its sales pitch today, pushing the parts of the law that are most favorable to its political strategy, it would be good for the press to follow Lazarâs example, and that of Eric Whitney at
Has America ever needed a media defender more than now? Help us by joining CJR today.