Personal income and small employer tax hikes The first series of tax hikes will hit personal income tax rates. Because many small employers pay business taxation at these rates, this is also a tax rate hike on small businesses. The 10 percent "tanning tax" has been on the books for two years. Since 201 1, we haven't been able to use our health savings accounts (HSAs) or flexible spending accounts (FSAs) to purchase non-prescription, over-the-counter medicines (the "medicine cabinet tax"). The research and development tax credit, which manufacturing employers depend on to cope with our world's-highest 35 percent federal corporate income tax rate, has already expired in 20 12 along with a host of other business and family tax relief.