05 June 2017 California senate passes bill to implement a single-payer healthcare system — payroll tax eyed as funding source On June 1, 2017, the California senate passed along party lines by a vote of 23-14 the Californians for a Healthy California Act (SB 562) that establishes the framework for establishing a universal single-payer healthcare coverage program within the state. The bill now moves to the California Assembly where new tax revenues to fund the system must be agreed to by a two-thirds majority. According to Senate analysis, approximately $200 billion in additional annual tax revenues would be needed to fully fund the annual program cost of $400 billion. The Senate report states that assuming these added revenues are raised through a new payroll tax (with no cap on wages subject to the tax), the additional tax rate would be about 15% of earned income. The language of the bill expresses that although the Affordable Care Act (ACA) brought improvements to health care and coverage to many Californians, it still leaves many with no coverage or inadequate coverage. Also mentioned is the concern that health care costs for individuals and businesses have increased, elevating the need for affordable comprehensive health care coverage not currently available through the ACA. California joins other states that are considering legislation to establish a single-payer health care system that would be funded by additional tax on income. For instance, a bill is again making its way through the New York legislature that would establish a single-payer system funded in part by premium taxes, including a payroll tax. (New York Health Act, A04738.) (See Tax Alert 2017-838.) In a report published in April 2015 analyzing the economic impact of the proposed New York Health Act, Gerald Friedman, PhD, Professor and Chair, Department of Economics with the University of Massachusetts at Amherst, recommended the following income brackets and marginal tax rates.
Document ID: 2017-0906 | ||||||||||||
