By NextBestFitPhase in employer taxes for small and low-wage firms
Lower rates for small firms and on the first part of wages.
Matches the model's payroll exemption.
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This path
Phase in employer taxes for small and low-wage firms
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Phase in employer taxes for small and low-wage firms
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- Employer health taxes can lower wages at firms that never offered coverage
Lower employer tax rates for small firms and the initial portion of wages protect low-wage jobs and prevent sudden costs for small businesses.
What it creates or worsens
- Leaves funding vulnerable or inflexible
Reducing employer tax rates for small firms and lower wages brings in less revenue.
- Requires difficult enforcement
Firms may split to remain eligible for the lower small-firm tax rates.
Who's affected
Who gains
- Low- and middle-income households
- Employer health taxes can lower wages at firms that never offered coverage: New employer health taxes tend to reduce wages at firms that previously offered no coverage.
- Employers
- Employer health taxes can lower wages at firms that never offered coverage: Small businesses that offered no coverage face a new payroll cost.
Who loses
- People with employer coverage
- Employer health taxes can lower wages at firms that never offered coverage: Savings at firms that offered expensive coverage can raise workers’ wages.
- Taxpayers and public budgets
- Leaves funding vulnerable or inflexible: Reducing employer tax rates for small firms and lower wages brings in less revenue.
Where it has been tried
- France: In France, employer social contributions on low-wage workers are phased down via a degressive reduction, offering up to a 39.8% to 40.2% maximum contribution exemption at minimum wage (phasing out up to 3 times SMIC in 2026).Sources: Service-Public.fr (2026)