June 27, 1997

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Washington, D.C. -- Senator Kit Bond, R-Mo., Chairman of the Senate Committee on Small Business, applauded a victory today as his bipartisan amendment to raise the deduction for health insurance premiums for the self-employed to 100 percent pressured the Senate Leadership to offer an amendment this morning that will accomplish this long sought objective by the year 2007. The measure, offered as an amendment to the "Tax Fairness Act of 1997," passed 98 -0.

The Amendment will incrementally increase the deduction to 100 percent by the year 2007. "It's not perfect by any means," Bond said, "but we have succeeded in clearing a major hurdle by passing legislation which fundamentally acknowledges that it is totally unfair that large corporations can deduct 100 percent of their share of employees health care costs, while the self-employed farmer, child care provider, or truck driver can currently deduct only 40 percent.

Senator Bond said that full deductibility of health insurance for the self-employed would make health insurance more affordable, resulting in more dependents being covered.

Currently, 5.1 million of the self-employed -- approximately 25 percent -- have no health insurance coverage, nor do 1.4 million of their children. "In the end, we all pay for that," Bond said.

A long-time champion of raising the self-employed health-care deduction, Bond worked closely with Sen. Nancy Kassebaum, R-Kan., former Chairman of the Senate Labor Committee, during last year's enactment of the Health Insurance Portability and Accountability Act that would have incrementally increased the amount that self-employed individuals can deduct to 80 percent by the year 2006.

Sen. Bond said that while last year's legislation was a step in the right direction, he has always been committed to full and immediate deductibility of health-insurance costs for the self-employed. Regarding today's amendment, Bond said, "2007 is great, but American families have health-care needs right now.

"We won on full deductibility, but we are not there yet," Bond said as he vowed to continue fighting to speed up the schedule with further legislation. Today's measure improves upon last year's legislation by phasing in the higher deductions sooner.

"Today's legislation represents the next phase of a remedy that family farmers and small businesses have long been waiting for to alleviate one of the most unfair burdens of our antiquated tax code," Sen. Bond said. 

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