But, see, health care will be totally free! That’s what those advocating for it tell us
California weighing proposal that could double its taxes
California lawmakers unveiled a new bill at the beginning of the year that would establish a single-payer health care system – an ambitious plan that would be funded by nearly doubling the state’s already-high taxes.
A new analysis from the Tax Foundation, a non-partisan group that generally advocates for lower taxes, found that the proposed constitutional amendment would increase taxes by roughly $12,250 per household in order to fund the first-of-its-kind health care system. In all, the tax increases are designed to raise an additional $163 billion per year, which is more than California raised in total tax revenue any year before the pandemic.
The proposal includes three main revenue raisers, according to Jared Walczak, a fellow at the Tax Foundation: Higher income taxes on wealthy Americans, a payroll tax on certain employees’ wages for large companies, and a new gross receipts tax.
Under the bill, the top marginal rate on wage income would soar to 18.05% – well above the median top marginal rate of 5.3% and the state’s existing rate of 12.3%. There would be an 18-bracket system, with higher taxes kicking in for individuals earning more than $149,509.The highest rate would apply to those who earn more than $2,484,121.
Totally free, right? Just wondering, how many of the rich folks in California would leave for other states immediately? How many non-rich will skedaddle to greener, cheaper pastures when they realize they’ll be paying for?
California would also expand the payroll tax paid by employees who earn more than $49,990 in annual income if they work for a company that has more than 50 workers. Walczak noted the plan could deter small businesses from expanding by inadvertently creating a tax cliff. For instance, if a company that had 49 workers earning $80,000 each hired one additional employee, they would suddenly create a tax bill of more than $90,000.
Finally, the state would also adopt a new 2.3% gross receipts tax (GRT) on qualified businesses minus the first $2 million in annual gross receipts, at a rate more than three times that of the country’s current highest GRT.
How many businesses will more out of state? I wonder if all the Hollywood business will be good with this? But, hey, California should give it a whirl. Every experiment needs an experimental group, right? And no complaining from all the Democratic Party voters in California, as this is what they’ve been pushing for.
