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American News Jan 18, 2022 9:57 AM EST

California moves to create single-payer healthcare plan that could double taxes for residents

Californian legislators are planning to pass an amendment to the state’s constitution to establish a universal, single-payer healthcare system with taxpayers bearing the brunt of the costs.

California moves to create single-payer healthcare plan that could double taxes for residents
Ian Miles Cheong Montreal, QC

Californian legislators are planning to pass an amendment to the state’s constitution to establish a universal, single-payer healthcare system with taxpayers bearing the brunt of the costs.

An analysis from the Tax Foundation suggests that Assembly Constitutional Amendment 11 (ACA 11), which requires two-thirds of both houses in the state legislature for approval, will introduce “surtaxes atop the current individual income tax structure beginning at $149,509 in income,” a “graduated-rate payroll tax system with the top rate kicking in for employees with more than $49,990 in annual income” and a “gross receipts tax of 2.3 percent, excluding the first $2 million of business income.”

Effectively, passing the legislation will increase Californian's taxes by $12,250 per household, “roughly doubling the state’s already high tax collections,” the organization said. The top marginal rate for wages would raise to a staggering 18.05 percent, higher than the national median top marginal tax rate of 5.3 percent.

According to the Tax Foundation, the package is designed to raise an additional $163 billion for California, which is more than what it raised in total tax revenue in any previous year.

Per the text of ACA 11, the single-payer healthcare system being proposed would benefit “every resident of the state” yet enable the legislature to “upon an economic analysis determining insufficient amounts to fund these purposes, to increase any or all of these tax rates by a statute passed by majority vote.”

In practical terms, this would give the state’s lawmakers a blank check to raise taxes to pay for the program.

The proposal comes as hundreds of thousands of Californian residents flee the state for greener pastures, especially to states with much lower taxes and less restrictive policies relating to the pandemic.

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