Bonus: Healthcare services will be extended to illegal immigrants.
When California Governor Gavin Newsom survived the 2021 recall election, it was pretty clear he and the Democratic political leaders in the state would double down on progressive policies.
Stand back, America, and watch the power of a fully operational socialist state.
California would enact a sweeping, first-in-the-nation universal healthcare plan under a proposal unveiled Thursday by a group of state Democratic lawmakers, providing health services to every resident and financed by a broad array of new taxes on individuals and businesses.
Though some of the policy details of the ambitious plan were laid out last year, the way to fund it had not been determined. The proposal, now laid out in separate pieces of legislation, faces significant hurdles in the coming months — first at the state Capitol, with opposition from groups representing doctors and insurance companies, and then possibly at the ballot box, as voters would have to approve the taxes in an amendment to the California Constitution.
“There are countless studies that tell us a single-payer healthcare system is the fiscally sound thing to do, the smarter healthcare policy to follow, and a moral imperative if we care about human life,” Assemblyman Ash Kalra (D-San Jose), the proposal’s author, said Thursday.
The plan calls for a wide array of taxes on payroll and income.
Assemblyman Ash Kalra proposed an amendment to the state Constitution that would impose an annual tax of 2.3% on businesses that have at least $2 million in annual revenue, plus a 1.25% tax on payroll for companies with at least 50 employees and a 1% tax for those employers who pay employees at least $49,900.
The plan also includes a series of tax hikes on wealthier people, starting with a 0.5% levy on the income of people who make at least $149,509 per year and ending at a 2.5% income tax for people who make more than $2.48 million per year. The California Taxpayers Association, which opposes the bill, says the plan would increase tax collections by $163 billion per year.
Tax Foundation’s Jared Walczak crunched the numbers to determine the possible damage the tax increases could inflict on people and businesses.
“Imagine, for instance, the overly simplified hypothetical of a company with 49 employees making $80,000 each,” he writes . “At 49 employees, the company has no payroll tax burden. Hiring one additional employee generates a tax bill of $90,000 — more than that employee’s salary!”
So, too, the tax on gross business receipts is poorly structured and harmful. Walczak explains:
“Gross receipts taxes are widely understood as extremely disruptive and inequitable taxes, because they are imposed on businesses without regard to their profit margins. For low-margin businesses like supermarkets, 2.3 percent of gross receipts may literally exceed current profits even if the company is doing well. For instance, Kroger’s profit margins dipped to 0.75 percent in late 2021 and have historically hovered around 1.75 percent. These taxes are even worse for businesses posting losses, including startups that haven’t turned profitable yet, because they are taxed on their receipts even if their expenditures exceed revenues. For startups, a high-rate gross receipts tax could be disastrous.”
California lawmakers have introduced a plan to almost *double* state tax revenue, at an additional cost of $12,250 per household.
A new 18.05% all-in top marginal rate on income.
— Jared Walczak (@JaredWalczak) January 6, 2022
As a bonus, the universal healthcare program will include illegal immigrants.
Governor Gavin Newsom presented his “California Blueprint” plan, detailing his $286.4 billion budget proposal for the 2022-2023 fiscal year.
Newsom’s office says his plan will “build on the state’s ongoing work to confront California’s greatest existential threats, bolster our strong economic growth and make historic investments in California’s future.”
Some of the notable parts in the proposal include fighting climate change and providing universal healthcare to everyone, including illegal immigrants.
Newsom’s “Health for All” proposal removes Med-Cal exclusions for all people living in California illegally.
Newsom recently went to social media to assert California is a “model for the nation.”
NEW: With a surplus of over $45.7 BILLION — California is a model for the nation on how we can confront our greatest existential threats and make historic investments in our future.
We can lead with science and still have a successful economy.
— Gavin Newsom (@GavinNewsom) January 10, 2022
He and I agree on that point. However, we diverge on exactly what type of model this proposal is.
California lawmakers are fantastic at finding clever solutions to hard problems. The Golden State is clearly a model to be emulated on how to effectively govern. They deserve even more tax dollars because they have proven they know how to effectively spend it. pic.twitter.com/eH8spsZwXh
— Leverage Point, Decades Not Days (@point_leverage) January 8, 2022
The only winners in this proposal are current homeowners in Utah and Idaho, who should continue to see their home values soar.DONATE
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