Let’s Double Our Taxes!
Gov. Gavin Newsom has announced that he’s fulfilling his promise to provide universal healthcare to all Californians (and non-Californians, regardless of immigration status) with a $2.7-billion budget proposal to expand state-provided coverage to low-income adults. Progressives, however, believe the boast is a sellout of his campaign promises.
“I campaigned on universal healthcare; we’re delivering on that,” he said during a speech in the Central Valley. Currently, MediCal provides coverage only to people under 26 and older than 50, so Newsom is arguing that expanding that program not only lives up to a top campaign theme, but — and let’s all say this in unison — is yet another bold step that should be a model for the rest of the nation.
There’s plenty to criticize in the plan. Assemblyman Tom Lackey, R-Antelope Valley, told ABC10 News that the official price tag won’t even be close to the final tab, which is a self-obvious critique. Furthermore, “it’s not even close to realistically covering what they’re indicating it’s going to cover.” No doubt about that, either, although most of the criticism is coming from the Left.
As CalMatters’ Dan Walters noted, union officials see the proposal as an inadequate flip-flop given that Newsom said he supports “single payer.” Newsom’s universal plan “includes a wide variety of public and private health insurance plans … while the latter would provide unlimited benefits free of out-of-pocket costs, much like Great Britain’s National Health Service,” Walters added.
We should all be thankful that Newsom merely is ramping up government spending and expanding a largely incompetent government agency — given the latest alternatives from the Legislature. Democratic legislators recently introduced Assembly Constitutional Amendment 11, which would “impose an excise tax, payroll taxes and a State Personal Income CalCare Tax … to fund comprehensive universal single-payer healthcare coverage.”
The Tax Foundation reports that the proposal “would increase taxes by $12,250 per household, roughly doubling the state’s already high tax collections” and would raise the top marginal income tax rate on wages to 18.05 percent. “All told, the new tax package is intended to raise an additional $163 billion per year, which is more than California raised in total tax revenue any year prior to the pandemic.”
That’s a whopping hike even in California, which has a $286 billion budget — and still can’t handle even the most basic problems. Instead of spending its already generous tax take more efficiently, these lawmakers would toss aside every existing private-sector health plan and replace it with a giant CalCare bureaucracy. Many Californians, myself included, are willing to put up with the state’s dysfunction — but not if it means relying on DMV-style system for our healthcare.
ACA 11 tries to address one glaring flaw in Assembly Bill 1400, the legislation that would create the single-payer CalCare system. That legislation, introduced last year, passed out of the Assembly Health Committee this month on a party line 11-3 vote. It has a ballpark-zero chance of making the end-of-month legislative deadlines, so it’s little more than a symbolic move by lawmakers to bolster their left-wing flank. Note that the author, Ash Kalra, D-San Jose, never called for an independent study of its proposed costs and is angry at Republicans who have done so.
The Legislature estimated that a similar previous bill would have cost at least $400 billion a year. That one passed the full Senate, but again lawmakers are not being serious. They went on record to approve a budget-busting effort that would threatened everyone’s healthcare and the economy knowing that it would never become law.
The Southern California News Group referred to AB 1400 and ACA 11 as political theater: “Democrats like to go on record supporting single-payer healthcare given that it’s a core demand of progressive groups, but even they aren’t about to pass a law that lacks an independent fiscal analysis or a non-laughable funding mechanism.”
For now, Californians who prefer not to wait 12 months for an MRI or die waiting for a bureaucrat to approve a life-saving treatment don’t need to find a Realtor in Texas or Utah. “A contentious single-payer universal healthcare bill has cleared its first hurdle — but because of political courtesy, not policy accord,” opined Los Angeles Times’ George Skelton. “It seems to face a very bumpy road ahead that, at this juncture, looks to be probably impassable.”
ACA 11’s tax increases require a two-thirds vote of the Legislature — and asks California voters to approve it. That means that the latest single-payer healthcare effort is all about political posturing given the unlikelihood of its approval, but we’d be wrong not to take this growing danger seriously.
One of the other obstacles is the governor, who is sticking with his more-modest approach. The Legislature increasingly is populated with lawmakers who might actually roll the dice on single payer — and unions keep pushing this priority (which is odd given what it would mean for their gold-plated programs). Despite Newsom’s eye-rolling claim about creating “universal” healthcare, we better hope his charade wins the day.
Steven Greenhut is Western region director for the R Street Institute. Write to him at firstname.lastname@example.org.