Don't Fund California Single-Payer Health Care With a Gross Receipts Tax

The sales tax' big brother tends to cripple growth, lower wages, and promote inequality, economists warn. Will that stop California from doing it?


Ingram Publishing/Newscom

California's single-payer health care proposal would eliminate premiums, deductibles, and co-pays for residents of the state, but would require massive tax increases—including the creation of a new, more complex version of a sales tax that would drive up the cost of living or doing business there.

There's still no fully formed plan to finance the California single-payer proposal, which cleared the state Senate with a 23-14 vote on Thursday and is headed to the state House. Implementing the so-called Healthy California Act, or HCA, would likely cost the state as much as $400 billion annually (that's more than California currently spends on its entire state government), and would require at least $200 billion in new revenue, if not more.

The bill is silent about how the plan would be funded, but an analysis published last month by the state Senate Appropriations Committee envisioned a 15 percent payroll tax increase to generate the necessary revenue. A new analysis released last week by researchers at the University of Massachusetts-Amherst, suggests that California pay for the single-payer health care plan with a new gross receipts tax of 2.3 percent, along with a 2.3 percent increase the state's sales tax (currently 7.25 percent), "along with exemptions and tax credits for small business owners and low-income families to promote tax-burden equity."

Those two tax hikes would generate an estimated $106 billion annually—far short of the $330 billion price tag attached to the HCA by the Amherst economists, so other tax hikes would also be required.

Still, the idea of funding a single-payer health care system with a new gross receipts tax should be a point against the creation of such a system, not one in its favor—no matter how much revenue the tax might produce.

Unlike regular sales taxes, which are imposed only at the final point of sale when a consumer purchases a product from a retailer, gross receipts taxes are applied at each and every transaction along a supply chain. In practical terms, you pay a sales tax when you purchase a widget from a store, and that's the only tax paid on the sale of that widget. Under a gross receipts tax, the widget-maker would pay 2.3 percent on the cost of the raw materials used to make those widgets, then the distributor would pay 2.3 percent when it buys widgets from the manufacturer, the retailer would pay 2.3 percent when it buys from a distributor, and so on. The taxes get rolled into the cost at each additional level and the consumer who makes the final purchase ends up paying for them all.

"Gross receipts taxes lead to higher consumer prices, lower wages, and fewer job opportunities, as the tax pyramids throughout the production cycle," explains Nicole Kaeding, an economist with the Tax Foundation's Center for State Tax Policy, a Washington D.C. tax policy think tank.

A gross receipts tax is particularly problematic for businesses that operate with high volumes and low margins—think fast food joints or any other company that relies on selling lots of cheap goods—because of how the taxes can cascade quickly and make profits impossible. They also distort the economy by favoring businesses that have in-house supply chains versus those that have to buy raw materials or products from someone else, because only the latter of the two businesses in that example would be hit with the tax.

Gross receipts tax proposals get tossed around periodically because governments are enticed by the promise of large, relatively stable (at least, more stable than income tax revenue, which can rise and fall with markets) amounts of revenue. But the trade-offs are not worth the benefits, Kaeding says, because "gross receipts taxes create economic problems that cripple growth, conceal true tax burdens, and breed inefficiency." That's why only five states—Delaware, Nevada, Texas, Ohio, and Washington—have a statewide gross receipts tax. Four other states—Indiana, Kentucky, Michigan, and New Jersey—recently abolished their gross receipts tax in an effort to improve economic conditions.

To be fair, there is an argument to be made that consumption taxes like sales taxes (even in the form of a gross receipts tax) are a more efficient and fair way of generating revenue than taxes based on income or property. That's a different debate, though, than the one happening now in Sacramento, where policymakers are not looking to offset one tax with another, but trying to increase taxes across the board to pay for a huge increase in government spending.

In a state that is already one of the highest taxed in the nation, there's good reason for officials to be hesitant about the creation of new, complicated taxes on California businesses and consumers. Gov. Jerry Brown, a Democrat, has so far mostly dismissed the idea of a single-payer health care system for California, telling reporters last month that the HCA was akin to trying to solve one problem by creating "even a bigger problem, which makes no sense."

Residents of the state seem to feel that way too. According to polling from the Pew Research Center, less than 30 percent of all Americans (and only 40 percent of self-identified Democrats) favor having government as the sole provider of health care. In California, a new poll from the nonpartisan Public Policy Institute of California found support for single-payer state healthcare at 65 percent, but with that number dropping to 42 percent when respondents were told at least $50 billion in new taxes would be required to pay for it—and that's an optimistic view of how much revenue would be needed.

For now, there is little evidence to suggest that states like California will actually implement single-payer health care plans. The development of these proposals seem to represent, as The New York Times put it this weekend, "the sweeping ambitions of a frustrated party, rather than to map a clear way forward on policy." In other places where single-payer proposals have been tried or suggested—including Vermont and Colorado, where proposals sank in recent years, and in New York, where a single-payer proposal cleared the lower legislative chamber last month—the price tags have been exorbitant and state officials have been unwilling to support the necessary tax increases.

"We don't have the money to pay for it," Sen. Tom Berryhill (R-Modesto) told the Los Angeles Times last week after the HCA cleared California's state Senate.

"I absolutely don't trust the government to run our health system," he added. "What has the government ever done right?"

(The original version of this post contained a reference to value-added taxes, or VATs, that was incorrect and unnecessary. It has been removed).

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  1. “Don’t Fund California Single-Payer Health Care With a Gross Receipts Tax”

    Why not “Don’t Impose Single-Payer Health Care”? Why is the method that they are using to impose the system the only part being criticized? This is a baffling article

    1. Yeah, we’ve already established that California’s already huge taxes are not even in the ballpark of being enough to cover it so at that point you’re going to need to admit that if they decided to put a gun to their head and pull the trigger, arguing about the caliber of bullet is a waste of time.

      1. One could also make a good argument that writing articles for a libertarian magazine website is a waste of time. Nevertheless, they persist.

        1. It is when those articles are endorsements of nonsense like UBI.

          1. Between the article about the UBI, the publication’s sketchy history of defending free speech, and now this convoluted article opposing California’s funding scheme, rather than the scheme itself, this publication is making Paul Ryan look like a free market radical.

            1. I’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life.

              This is what I do…

          2. I think you miss my point. But that’s OK.

            I don’t think UBI is a great idea, but it doesn’t hurt to read about why it might be better than some alternatives. Reason foundation tries to be a relevant policy thinktank. I don’t have a problem with that, even if it means that most of what they produce isn’t completely pure libertarian ideology. There are plenty of places where you can get that.

            1. I have no problem with the UBI article either. It wasn’t praising the UBI. It was reporting events and history and I think it was done well. I do agree though that attacking the funding angle lends an air of legitimacy to the underlying goal of a government health care monopoly. The implication is “If only it was funded a different way or cost less it would be OK”.

        2. What I mean is simple: IF one accepts the premise in that way that Eric does who cares how they fund it?

          It’s going to necessarily explode no matter what, so it’s a literal choose the form of your destructor test. It’s a multiple choice test where every answer is wrong. It’s 10,000 spoons when all you need is a knife.

          Wait…I don’t know how that last one always ends up in my lists…

          It’s like trying to mandate that insurance companies provide preventative care; you can not insure against a sure thing so anything past that means you’ve already lost or you’re accepting alternative definitions to concepts they don’t apply to.

          All anyone needs to do regarding the California single-payer plan is wait for the inevitable federal bailout request because that is literally the only thing that is going to happen, for sure, without one iota of doubt.

          1. I can’t really argue with you there.

            Maybe he just had something ready to go about why gross recepts taxes are bad and this seemed like a good tie-in to current events.

            1. Probably, and I for one am grateful because I hadn’t heard the Gross Receipts Tax. Up until now I’ve always heard it called the Value Added Tax so I’m glad to know they’ve invented yet another word to hide what they’re doing. ^_^

              1. I think Eric Boehm got it wrong. When people talk about taxing gross receipts, they’re referring to just retail sales of goods (all goods, including capital goods) plus services (which aren’t usually taxed as “sales”), rents, etc. A tax on all transactions is a transfer tax?still not quite the same as a VAT, but it works out closer to that. A VAT doesn’t tax the amount of a transaction, only of the markup or increase in value.

              2. A gross receipts tax isn’t the same as a VAT. A VAT levies a tax on (effectively) the profit of any company in the chain. A grows receipts tax is applied on total revenue. It’s much worse.

          2. We should not try to talk California out of the single-payer plan, because the states are the Laboratories of Democracy?.

            If the mere fact that it is a monstrously expensive, clumsy and foredoomed idea that will drive any employer that can leave to do so doesn’t serve to wave them off, let them hit the wall and serve as a warning to the other 49. (I except DC, because it is only a state of mind.)

            However, let us be forewarned against their demands to be bailed out. As a matter of fact, let’s get started on an anti-bailout law now.

            1. Not sure the border is large enough to accommodate all the free-thinkers, leaving and the free-loaders arriving.
              Kalifornia already has one third of all welfare recipients. I guess an ideology, whose idea of growing an economy is from the bottom up, would want all the bottom-feeders it can get.
              China needs to look out if they want to have the world’s biggest economy. Here comes Kalifornia.

            2. ^ This

              1. I would love to see this single payer system get passed in California!
                That would be just AMAZING

    2. This entire website is baffling. What the hell do they actually believe in? I guess that if it were affordable with a small tax increase, the lefties that pose as Libertarians here at Reason, they’d be all in for it?

      1. Well, you could try reading the actual articles and find out. Scanning blog posts isn’t really the way to do it. Reason is also pretty good about not enforcing ideological consistency among their writers, so it’s probably not reasonable to say that “they” believe in anything beyond being generally “libertarian” in some sense or other.

        It’s also not a purely ideological organization. The point of most of their articles isn’t to win the libertarian purity contest, but to analyze policy and current events from a libertarian perspective. Which I think is good. You only need so many articles declaring the pure libertarian view on government provided healthcare. I like to think that on a libertarian site, it is safe to assume that everyone already knows about the principled moral objections.

        1. Hear, hear!

          BTW, we generally WANT Kalifornia to pass this law. It may be that their purpose in life is to serve as a warning for others.

      2. It is a website. They believe in generating revenue. So please keep clicking.

  2. “Don’t Fund California Single-Payer Health Care With a Gross Receipts Tax”

    Is there anyone other than a proggy who fantasizes that there’s a *good* way to fund this boondoggle?

    1. I know that some people like to call Reason “cosmo” when they aren’t sufficiently conservative (or something). But this is when Reason seems “cosmo” to me. They get squishy on topics like this. Instead of saying “taxes are immoral” they’ll say “this method of taxation won’t work very well.” They get wonky and detail-oriented about things that shouldn’t even exist or happen.

      1. They’re trying to persuade the libs and wonks, not us.

        1. The proposal is a trial balloon specifically to see what weaknesses opponents might target – making the argument that it’s unaffordable just means the proponents are convinced if they can make the math work the proposal’s a done deal.

          1. I’m with you, Jerryskids, this is a done deal. Californians will love it.

        2. You seriously think that libs read this site, a site they consider to be close to a fascist propaganda rag?

          Furthermore, you can’t win arguments with libs within their belief system because it is internally not consistent.

          A libertarian newspaper should provide analysis in a libertarian framework, not try to propagandize to libs.

      2. What’s wrong w pointing out in detailed wonkiness why even something that shouldn’t exist or happen still won’t work well?

        1. Like for instance, there’s an unending parade of stupidity out of gov’t-run schools in terms of both content & methods, irrespective of the country or locale it goes on in. Shouldn’t we read about them, even if we don’t believe in state schooling?

  3. So if they pass this thing they will be raiding the pool where furture employee hires and pay raises come from and then they will be complaining about stagnant income for low and middle class people but will refuse to acknowledge any connection.

  4. RE: Don’t Fund California Single-Payer Health Care With a Gross Receipts Tax
    The sales tax’ big brother tends to cripple growth, lower wagers, and promote inequality, economists warn. Will that stop California from doing it?

    1. No, it won’t stop California from further eroding their economic growth via single-payer health care tax.
    2. This should surprise no one who knows anything about what’s been going on in the People’s Republic of Kalifornia.
    3. I can’t think of a better way to enslave the unenlightened masses than through healthcare.
    4. Ask me again why I left Kalifornia decades ago.

    1. Why’d you leave Kalifornia decades ago?

    2. But since I’ve never asked you the first time, HOW can I possibly ask you again? Help me out, here, I can’t figure it out

  5. No one should forget that single payer is the same as monopoly payer. On addition single payer will enforce its monopoly by state force making it a coercive monopoly too

    I thought the left opposed the concept of monopolies as bad. I guess the exception is the state and its monopolies.

    1. We’re enslaving ourselves, so then it’s okay.

    2. Of course. That’s the monopoly they like.

      1. A monopoly sans profit motive, thus removing at least some of the major problems of a monopoly.

        1. Except, of course, the great moral profit and so-called “high ground” which you and the your kind love to occupy.

        2. The profit motive is tbe primary driver of setving the customer. An institution without profit motive only looks to perpetuate its own flabby existance.

          1. An institution without profit motive only looks to perpetuate its own flabby existance.

            ^ This.

            Plus, having worked with dozens of different government agencies and probably hundreds of private companies, I can tell you with some authority that few in the private sector are as brutal in their approach to cost cutting and bottom-line-myopia as the typical government agency.

            1. Which is why government agencies pass around a wish-list where everyone buys unneeded but plausible loot at the end of the fiscal year, to justify their budget and make sure it doesn’t get cut for the upcoming year.

              I don’t think your comment said what you wanted it to say.

        3. A monopoly sans profit motive

          The worst kind.

          thus removing at least some of the major problems of a monopoly.

          Removing the one remaining thing keeping a monopoly in check.

          Go look up the economics of a public utility. They’re usually a monopoly, but even the monopoly utilities still have to worry about setting prices that will maximize revenue without losing too many customers or people cutting back too much. A government monopoly, funded through force, need not worry about these silly things like pleasing customers or finding market clearing prices.

        4. Politicians crave something better than profit.


        5. No profit motive? Where I live, government always talks about maximizing tax revenue.

    3. The word for a single purchaser is “monopsony”.

      And, yes the Left does not see any priblem with concentrating economic power in government, as long as the right people control it. Any concentration of power in private hands frightens them immensely even if it is not a monoploy under a reasonable definition.

      1. Private power doesn’t come with a constitution full of checks and balances. It usually comes with a sociopathic mandate to milk people out of their money.

        Thus, the thing with internal checks and balances, including democratic accountability, needs to have more power over the other.

        1. I prefer the democracy that if an institution does not serve me well then I can choose to not patronize it. I cannot do that with government monopolies.

          1. There are more than 200 different forms to choose from on this planet, and myriad variations on our own in this country. Few market products offer nearly as many options. So that’s not a legitimate thing for a grown adult to bitch about.

            1. Then go find a government founded in the principles thst suit you and stop trying to change this one. I am sure North Korea woukd love having you.

              1. North Korea’s is probably the least appealing government on earth to me, so why would I do that?

                Trying to change this one is what being a citizen of a democracy means. You stop trying to change it. Your ideas are stupid. Collect whatever government check you undoubtedly receive and let the grownups do government, since you guys don’t even believe in it.

                There’s a couple ungoverned places left for you to go to if you really want to. Good luck finding a KFC there.

                1. Trying to change this one is what being a citizen of a democracy means. You stop trying to change it. Your ideas are stupid.

                  ^ Democracy, in Tony’s understanding.

                  Collect whatever government check you undoubtedly receive and let the grownups do government, since you guys don’t even believe in it.

                  ^ Tony once again showing that despite having visited this site nearly every day for the past decade, sometimes spending all day here, still has no idea what libertarianism is.

                2. How’s the KFC in Oklahoma (since single payer in California will never affect you)?

                3. Trying to change governments is what democracy is all about, but if you don’t like what Tony wants this one to be it’s on you to get up and move to one of the others, at least until some new batch of Tonys there come along to change it. Then it’s on you to move again.


                1. Oops! I mean my “Amen” for Micky Rat, not Tony.

            2. There are more than 200 different forms to choose from on this planet, and myriad variations on our own in this country.

              I want you to say “America, love it or leave it” in your Oklahoma accent. Please? Just once?

        2. Except that a monopoly in the private sector has no power over you. No one forces you to buy anything (Obamacare notwithstanding). If you don’t like the prices a monopoly charges for something, find an alternative. Get investors to help you with startout capital for a brand new thing. Go without. In addition, monopolies don’t exist like they do in the board game. Is there only 1 insurance company? (Actually, there are fewer doing business than before Obamacare) Is there only 1 softdrink company? Is there only 1 car company? When monopolies (other than those propped up by government) become too greedy, or lazy or provide crappy service, up pops an alternative.

          On the other hand, there is only 1 IRS. There is only 1 FBI. There is only 1 SCOTUS. You don’t get a choice in what you pay taxes for, or to whom you pay.

          And speaking of democratic accountability, let me pose this question:
          If you are in a bowling league, and 50% +1 of the members vote that they don’t have to pay dues, but the rest of you do, is that fair? You might very well leave that bowling league and join another. Or take up another hobby. YOU DON’T GET THE OPTION WITH GOVERNMENT.

          1. You do get the option with government. You can find another government, as I just said. What more do you want? Ten supreme courts? What would the basis for competition be? Monopoly on force is the definition of government and, for some weird reason, every territory on earth that is not a deadly shithole has found it prudent to implement one.

            The idea that a private monopoly has no power over you is similarly bizarre. If there’s only one grocery store, I have no choice but to shop there if I want ot eat. That’s not power?

            1. There are no private monopolies that are not propped up by government power. The situation you describe is a hypothetical at best. While government monopolies are all too real.

            2. You have plenty of choices. Drive farther. Grow your own food. Order online.

              The only reason you think the grocery store in your example has any power over you is nothing but sheer laziness.

              On the other hand, let’s all vote on what the grocery store can offer. And let’s make it illegal to order food from another place. And let’s require you spend a minimum on food at that grocery store.

            3. “every territory on earth that is not a deadly shithole has found it prudent to implement one.”

              And compare the deadly shitholes of places with no government to:
              USSR, (and every country in Eastern Europe until 1991), China, North Korea, Cuba, Nazi Germany, Imperial Russia, Imperial Japan, the American Colonies until 1783, Confederate States of America (at least if you were a slave), Iran, Iraq, Syria, Egypt, Saudi Arabia, etc.

              For the record, I am not an anarcho-capitalist. I am a minarchist. The US Constitution exists to limit the powers of the Federal Government. But no one seems to want to limit the Federal Government anymore.

              1. The US Constitution exists to limit the powers of the Federal Government.

                Actually it was meant to greatly expand them, but whatever.

            4. Says the guy who makes excuses for choosing to live in red state fly over country.

              Because you can go where you want to!

        3. And you say that in a comment on a article where a government is trying to figure out a way to milk its citizens if their money that is stil nowhere near adequate to pay for the expenses they wish to incur.

          1. And you’re complaining about the high cost of goods and services in US healthcare sector while downplaying the negative effects of private-sector monopolies (or pseudo-monopolies).

            Cost is a primary issue in this country and is why states haven’t succeeded at building their own single-payer systems.

            1. FFS, the cost of health care started rising very quickly after the advent of:

              Medicaid and Medicare.

              The only reason insurance companies have any sort of “pseudo-monopolies” is because health insurance companies can’t provide policies across state-lines. So once again, a government enforced “monopoly”.

              But even then, you shouldn’t be “forced” to buy insurance. You can pay cash. You can not go to the doctor or hospital.

            2. And you’re complaining about the high cost of goods and services in US healthcare sector while downplaying the negative effects of private-sector monopolies (or pseudo-monopolies).

              This is a bizarre statement considering all that a sentient being would take away from the things they’ve read on this page.

              All doctors in this country have to be licensed by the AMA, by law. The AMA restricts the number of new residents every year in this country to 100,000, keeping our per capita number of doctors to half that of other developed countries.

              All drugs in this country have to be approved by the FDA, which actively prevents competition from arising for, for example, the EpiPen, so that people have to pay severely inflated prices.

              All hospitals in most states in this country can’t be built without the express permission of the state governments, who deliberately restrict the market.

              But you’re here bloviating about some abstract tyranny in the private sector where if we stopped the government from fucking us over in all these manifest and apparent ways, then we’ll start to see the real monopolies take hold.

              Because without the government criminalizing competition there would be less competition, I guess?

              1. No, doctors aren’t licensed by the AMA in the USA. They’re licensed by boards which are depts. of state gov’ts.

                1. Indeed, and while I’m not aware of any hard caps nation-wide there is some truth in the idea that the board itself usually has a personal financial stake in keeping the waters relatively clear of smaller fish, so to speak. It wouldn’t surprise me if some states had a hard cap, but I’d guess if there are any they would be in a tiny minority in the North-East somewhere.

                2. Who are all required to be members of the AMA in good standing.

  6. Can’t they just fund it with the profits from the bullet train?

    1. Ha! You win 0.5 internets!

  7. Hey, I might actually be able to afford to stay in California when I retire, if health care is free.
    And it would make sense to retire earlier too, so I don’t have to pay for these boondoggles.

    1. Just don’t get sick – – – – –

    2. That will be the balancing act. Stay for “free” health care or get out to preserve your equity. I’m probably out. I’m not sure that this pathetic plan will result in lower population but it will impact property values because the upper middle class will get out. In fact, Oregon, Nevada and Arizona might want to prepare for some up migration.

      Maybe along with reading, writing and math they should require basic economics as part of curriculum.

  8. “What has the government ever done right?”

    Presumably cut your paycheck on time, moron.

    1. Yes, they’ve cut it by a significant chunk and are quite good at making sure they get paid timely.

      1. Maybe Americans should give up on the idea of electing people to public office who don’t believe in public service.

        1. Personally, I prefer my government officials to not belong to the Church of Leviathan.

          1. You mean you’d prefer if more people would, like terrorist moles, infiltrate the existing government and operate it according to your specific weirdo political theories. That’s fine. Get more people to believe in your bullshit.

            1. One Party, One Folk for you, then.

        2. Tony|6.5.17 @ 4:24PM|#
          “Maybe Americans should give up on the idea of electing people to public office who don’t believe in public service.”

          So we should admit the twits claiming to work on our behalf are actually liars, hoping to line their own pockets? And maybe we should try to reduce the opportunities to do so?
          I LIKE it!

        3. Maybe Americans should give up on the idea of electing people to public office

          It would be a good start.

  9. Didn’t we just learn earlier in the week that Single Payer means Simon Cowell pays for everything? He’s the single payer. Problem is, while he may have the funds to cover the back surgery for a talented girl that NHS in all its glory couldn’t be bothered with, I doubt he can cover the costs for the entire state of California for very long.

  10. They also distort the economy by favoring businesses that have in-house supply chains versus those that have to buy raw materials or products from someone else, because only the latter of the two businesses in that example would be hit with the tax.

    A problem that infers its own solution.

  11. $400,000,000,000 for 40,000,000 people is about $10,000,000 per person. Currently the state is spending (using state and fed dollars) about $50,000,000,000 for medicaid, making the new costs $350,000,000,000 or $8,750 per person.

    I can’t find easy numbers for what insurance premiums are actually costing people, so I’ll use my 30-something head of household family plan numbers. I paid about $13,000 for that family plan last year, and it covered two adults (me and my husband, both 30-something men) giving us about $6,500 per person before deductibles, co-pays and etc.

    So assuming I’m a representative sample?, the real cost increase would be around $2,500 per person.

    So standing here now, this would be “bad” for me. We’ve only had $2000 out-of-pocket medical expenses so-far this year (a series of unfortunate and unexpected medical events), but if we get another ER-visit scare that gap could easily close to being in the “good”.

    So argue it’s bad for other reasons, but you’ll need to do more then sticker shock to convince me the price is terrible scary.
    ?Bad assumption, but we work with the data we have.

    1. Sorry, the cost is the total mount paid, not just the part left over for you to actually see.
      So at best, a doubling of all current taxes in the state, and a large reduction in the availability of healthcare.

      1. One can not possibly hit on the issue on healthcare availability hard enough given that all doctors and healthcare providers in the state of California will flee as soon as this is implemented, and those few who remain will have waiting lines of several years to be seen for a cough.

        Don’t believe me? Vote for the act California! I invite you to witness the laws of finite resources first hand. Best case scenario you’ll have LVN’s performing abortions and you’ll will never lay yours eyes on an M.D. in person again.

    2. Understand, the state would double its budget. The State Senate analysis says 15% payroll tax. That means that you will be taking home a shitload LESS money. And if you make more, you will pay more. Which means if you are above the average income, you will be shelling out more than the 10,000 per person. If you and your husband gross 200,000, then that is 30,000 you are paying (15,000 per person).

      Shit gets expensive real quick.

      Which also means everyone has less money to spend on other things, which means that employers will hire fewer workers to produce fewer goods and services. So more people making no money or less money. So to keep the health care system afloat, either more taxes (on those who pay them) or more rationing.

      Can’t you see how this spirals?

      1. I love how libertarians/Libertarians assume that if someone doesn’t agree with them, they don’t know how to read a paystub.

        Here’s a fun trick: Assuming you have a job that you get your insurance through, check what your employer-side contribution is. Then calculate that as a percentage of your gross.

        The number is probably close to 15%.

  12. On the other hand, a gross receipts tax is hidden in the cost of products, not called out clearly like a sales tax. (notice all the people that report the ‘price’ of gasoline include all taxes)
    In addition, you need a vast bureaucracy to enforce it, so more government employees who will vote the ‘right’ way.

    Or they could just pass a 500% tax on all contributions to any and all progressive / liberal politicians or PACs, and require a $5,000,000.00 fee for all speakers who take a political position on any topic.

    Or just secede already!

  13. If the Healthy California Act covers abortion, then abort this law.


    Don’t laugh or jeer too much, however. If this breaks the state legions of uninformed voters may flood other states.

    1. If? More like when.

  15. “support for single-payer state healthcare at 65 percent, but with that number dropping to 42 percent when respondents were told at least $50 billion in new taxes would be required to pay for it”

    Hilarious, there are millions of people in California who believe that average health care costs per person is significantly less than $1200 per year.

    These are the same types of people who truly believe that wind and solar are cheaper than carbon fuels and the reason we don’t use them is because of a grand conspiracy between politicians and oil companies.

  16. Phila. has a gross receipts tax of 1.415% so Cal is suggesting one 63% higher. Phila. ranks dead last in the 10 largest cities for job creation. Even Detroit has higher job growth right now. Phila. also has the highest poverty rate – 33% – of the large cities. I just read an article lamenting Phila.’s low job creation and, largely, blaming high business and wage taxes. This, according to one of the largest Democrat movers and shakers in the City. So, go for it California!

  17. Subhead:

    The sales tax’ big brother tends to cripple growth, lower wagers …

    Wanna bet?

  18. Gross receipts taxes lead to higher consumer prices, lower wages, and fewer job opportunities

    Perfect for California then.

  19. Weird how you failed to mention a Land Value Tax, the most efficient and non-distortionary tax in existence, which would begin to undo the Feudalistic nature of prop 13 and the obscene private appropriation of public rent.

    California could simply learn from their history and apply a Land Value Tax and jumpstart their economy and provide for their citizens as they did during the agricultural boom.

  20. I do wonder what you are on about with the statement about Washington already having this sort of tax. I live here, and operate a business here, and I’m unaware of such a tax.

    Yes, we have a “Business and Occupations” tax, a small percentage on gross sales that the company is charged at a very small percentage rate on all non-exempt sales to residents of this state. I suppose it could be considered cumulative, as every business on down the line must pay it. It does not work like the one you mention…

  21. Oh goody! My chance to be contrarian!

    PLEASE pass this California!

    It will be a great boon to the rest of the nation when all of Silcon Valley packs up and moves to other states (probably Texas I suppose). I know you THINK that your liberal friends at Google, etc. are fully behind you, but that was up until you present them with the bill.

    PLEASE California, go one step further and declare yourself a separate country! Do it at the same time, take no delays! The rest of us really don’t want you anyway, and why should our desires and silly politics hold you back from enlightenment?

    PLEASE, PLEASE, PLEASE ….. Take Tony with you.

  22. Keep in mind too that these taxes, if enacted, would just be the opening bid. Government programs always end up costing more than their boosters are willing to admit, and the revenues from a given tax are always less than their boosters are willing to admit.

  23. Please California. Do it and be the warning to the rest of the idiots that think this is a good idea and want to force it nationwide.

  24. There are reasons to not have single payer state by state. This article doesn’t justify the conclusion for California. ER’s are inefficient, clogged with unreimbursed costs instead of cheaper primary care. Medicaid_spending_in_California
    Calif. per capita Medicaid $4803 per enrollee in 2012, and $6833 national average. I.e.: California has more cost effective Medicaid than the nation as a whole,

    However: Our news reports how few doctors accept Medicaid, so Medicaid reimbursements are too low for market clearance, if healthcare is a sensible entitlement.

    Note: healthcare is not a right. It is not inherent to the person (like free speech), no matter how desirable you think it is a desirable economic good. Good roads are the comparison: they make the economy flow.

    California’s Medicaid spend is 64% of my employer’s COBRA charge on our PPO and 102% of the charge for Kaiser, an effective health delivery system. (Disclosure: I have been a happy Kaiser member for 20+ years.)

    Let’s assume single payer has similar bureaucratic inefficiency to the current pseudo-private system. based on raw Medicaid numbers the costs of a state system are competitive to current system. Analysis needs to see what is included compared to current, and whether better delivery (i.e. universal access to primary care) has better health results, and what that is worth economically to the state.

    The gross budget cost to the state is not an argument against this proposal.

    1. Hahahahahahhaaahhhhaaa…..This from a state who’s pension fund CALPERS returned less than 1% when Joe dumbass’s 401k Index Fund returned 12% last year. Even with the leverage of having hundreds of billions in AUM they returned half a fucking per cent.

      Like wise, try finding a doctor who speaks English if this shit passes. Do you seriously think a lot of docs won’t head for the hills (or at least Nevada) once they see what a state board will reimburse them for services.

      How many permanent welfare cases will move in and how many people making 200k who don’t want to pay as much for a shitty VA style health care system as the mortgage for a 500,000 dollar house in another state will move out.

      It’s almost like progs aren’t aware of unintended consequences. But yeah, if it puts the brakes on other progtards around the country it would be a net positive.

  25. Who the fuck cares how these retards fund their ill fated initiative? As long as the taxes are confined to CA citizens (not a given, I know), then let them experiment.

  26. California’s health care system is already about 70% publicly funded, so that 331 billion figure that would be the total cost of running a single payer system. A study, published by the UCLA Center for Health Policy Research, found that of the $367 billion to be spent on healthcare in the state, about $260 billion will be from taxpayer dollars. By redistributing funds, and let’s keep this estimate conservative for the sake of pleasing the close minded, and the skeptics, let’s say it costed 340 billion due to an unanticipated reason to provide 100% universal coverage to everyone instead of 331 billion, and we’d only be able to keep 240 billion of public funds due to budget cuts at the federal level made by the trump administration. IF these taxes passed, as well as this bill, we’d still have a 6 billion surplus. And while I may not be in favor of the specific taxes proposed, it’s worthy to note that since most families will have between 5-15K extra in their pockets each year from not paying for healthcare anymore, that even if everything becomes a couple percentages more expensive except for food, utilities and other basic needs, it’s foolish to think that with the savings that most businesses and most individuals and families would not in turn produce an even stronger economy. More money in the bottoms pockets means more money spent at businesses and products, so now millions of people will be able to shop at local businesses instead of walmart now since they can afford it.

  27. I don’t care how they fund it.

    Just insure that we won’t have to bail them out when it goes tits up in a year.

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