Posted on 12/17/2007 8:49:18 AM PST by goldstategop
in·cred·i·ble –adjective
1. so extraordinary as to seem impossible: incredible speed.
2. not credible; hard to believe; unbelievable: The plot of the book is incredible.
—Synonyms: farfetched, astonishing, preposterous.
"It's an incredible plan," said Assembly Speaker Fabian Nuñez (D-Los Angeles).
The Speaker’s quote about the just-struck agreement on government healthcare with Governor Schwarzenegger unintentionally speaks volumes.
Incredible, farfetched, preposterous, hard to believe – call it what you will, the plan will cost far more than advertised and will drive business out of state, reducing state tax revenue and throwing people out of work.
Beginning with a low-balled $14 billion price tag, the plan to increase taxes on business, hospitals, and tobacco to provide health insurance to 3.6 million people will devastate an already unsteady economy. California’s budget already has a $14 billion hole in it, thanks to a complete lack of spending discipline and a housing boom gone bust. Adding massive new taxes and a massive new social welfare program will compound the problem and push California over the brink of financial disaster.
The State Assembly is expected to vote on the government health insurance plan late Monday night, December 17. It is expected that Democrats will push through the healthcare deal without the tax increases to pay for it, as new programs need only a simple majority to pass while new taxes require two-thirds approval of the Legislature. The higher hurdle for tax increases will force the Democrats and the Republican governor to punt the tax hike to the people as a ballot initiative, probably in the November 2008 election.
Governor Schwarzenegger and Speaker Nuñez intend to pay for this big increase in government with three new taxes: a $2.3 billion tax on hospitals, a $1.50 per pack tax increase on cigarettes, and a new payroll tax on business. Many hospitals say they want the new tax as they expect to get more than that back in insurance reimbursements. Of course, some hospitals would rather not be taxed, highlighting the fact that taxes are levied with the power of government compulsion. The latter two taxes are more problematic.
Taxing tobacco is always popular in health conscious California. The (happy) problem is that fewer and fewer Californians smoke every year, making this a declining source of revenue. Some analysts are already expecting that the new tax would have to be set at $2 per pack to make up for a declining base of smokers and a higher loss of tax revenue due to increased tobacco smuggling by criminal gangs.
The tobacco tax would be a mere annoyance compared to the havoc the payroll tax would wreck on business. The plan calls for small businesses with payrolls of up to $250,000, under 10 employees for most California businesses, to spend at least 1% on healthcare for their workers. If they didn’t, they would get hit with a payroll tax to fund a state-run health insurance pool. Firms with payrolls of up to $1 million would have to pay 4% of their payroll costs to healthcare while those with payrolls up to $15 million would have to pay 6%. Bigger companies would have to pay 6.5%. Such a payroll tax and healthcare cost mandate will severely distort market forces. It will encourage small business owners who already provide healthcare coverage to drop it in favor of the state subsidized system. It will also cap business growth since an employer could see a large increase in payroll costs with a commensurate drop in profit as their labor costs crossed a key threshold at $250,000, $1 million, or $15 million.
Even more discouraging is the fact that this new tax talk is occurring at all. Governor Schwarzenegger was elected and reelected on a no new taxes pledge. In 2003, the year of the recall, the Tax Foundation ranked California 44th in the nation on its overall state business tax climate. After the governor pushed along workers compensation reform and cut the car tax, California’s overall standing rose to 39th – a good start, but still far less friendly to businesses that provide jobs and pay taxes than any of our Western neighbors. Since then, California’s competitiveness has fallen so that our 2008 business tax climate ranking stands at an abysmal 47th – just ahead of New York, New Jersey, and Rhode Island.
The Tax Foundation, a national nonpartisan educational group founded in 1937, says California has the highest individual income tax rate in the nation with one of the most highly progressive tax rate structures in the nation. Most small business owners pay their business taxes at the rates for individuals, so this high tax comes at the price of discouraging entrepreneurship. Meanwhile, California’s corporate income tax rate is the highest among Western states, serving as a powerful inducement to relocate out of state. Our sales tax rate exceeds the national average and, even with Proposition 13, our property taxes are only slightly below the national average. Add these taxes up to the proposed new payroll taxes for healthcare and you get a formula for California having the worst business tax climate in the nation.
Thankfully, in addition to legislative Republicans, who have been left out of the sweeping healthcare deal between Schwarzenegger and Nuñez, a voice of reason has emerged from an unlikely source: Senate President Pro Tem Don Perata (D-Oakland). Perata, who supports most of the government healthcare plan, said he will delay a Senate vote on it until the Governor explains how he will close the ballooning $14 billion deficit without hurting the poor and disabled with healthcare cuts on existing welfare programs.
Polls show that Californians are satisfied with the quality of their healthcare. Our challenge is not with access to healthcare, but rather with how to pay for it. Organizations on the left, such as the California Nurses Association and the California Endowment, a billion dollar-plus nonprofit ostensibly created to fund healthcare for the poor, favor a total government takeover of the healthcare system. At the other end of the political spectrum, legislative Republicans have repeatedly called for applying free market principles to an over regulated industry. Republican proposals, never granted a full hearing, include allowing out of state health insurance to compete in the California market, promoting health savings accounts (California is one of only four states that taxes health savings accounts), and encouraging low cost healthcare clinics at retail chains as has been successful in other states.
California’s budget is collapsing under the twin pressures of unrestrained government spending and a tax code that punishes productive taxpayers with the highest income tax rates in America. This cannot continue. Business-friendly Nevada rates the 3rd best business tax climate in America; California ranks 47th. We need to cut tax rates, not increase them. Government must live within our means to pay for it. To do anything else would be incredible.
Classic pincer movement:
From the left, organized labor struck pay dirt by supporting Democrat liberals.
From the right, business dines sumptuously at the public trough as a guest of the CAGOP's European whore.
Little is left in the center to support California's productive class.
I used to hold the delusion that government wasn't totally corrupt.
I'm awake now. ;-)
If you rob Peter to pay Paul, you can, as George Bernard Shaw famously said, always count on the support of Paul.
Looks like here you can call the hospitals Peter first, and then Paul later. In fact, if their only reason to support this boondoggle is because they stand to take more money from the state than they have to give it (i.e., their Paul is bigger than their Peter), then you can also call them the nappy-headed name that got Imus into so much trouble.
No Ho Ho... Phhhhhhhhht!!!
Actually, I still love CA enough that I'd probably turn into Lot's wife and look back at Sodom & Gomorah (Buzzerkeley and San Franpsycho) one last time and turn into a pillar of Mormon Salt!!! Ha ha Ha!!! (one glance at that stupid "gay pride" parade will do that to ya)(as will one ticket to Reno's Gay Rodeo)
Well Rachael, baby... You can just cook me up some desert with them flippin/floppin Italian speakin hands of yours and I'll approve THAT massage!!! (snort!)(smirk)(grin)(grimace!)
On second thought, just stick with the message, but shove it in the terminator's face till he gits it, will ya??? (yes, I know it's hopeless)(he squandered all his chances to do what's right!)
With all this stupid "star power" floatin around in CA, even floatin in and out of FR, it's kinda hard for CA's productive class to do anything but hunker in the bunker and pray for sanity to return and for a champion to emerge with the drive and resources to represent the productive class in the CA GOP and in the elected government in majority proportions!!! (Like about 66 and 2/3rds percent!)
Is this like some of the other state goverment health care plans that will get a massive amount of federal money to help implement it? It could be that we will all get stuck with part of this bill, and there will be outside support, it won’t look as expensive as it really is.
Just wondering...
Well, it’s still not totally corrupt, but the miniscule parts that aren’t are being threatened by the growing majority that is!!! The “good” people are NOT stepping up! They’re hunkerin in the bunker, waitin for the productive, right-minded people to revolt!!! Well... It certainly IS revolting, don’tcha think?
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Yea RIGHT. The candy-a$$ed democrats let the the chief girlie man Arnold Kennedyneggar will pass this muck and the folks in California will stand by and allow it to happen.
Look for a federal bailout of the Bankrupt California government soon.
I’m waiting for the enactment of laws prohibiting businesses from moving out of the state.”
In other news: Warren Buffet is buying U-Haul stock.
http://www.sacbee.com/static/weblogs/capitol_alert/insider/archives/009658.html
Here is the breakdown:
• Employer fee in lieu of providing coverage: $1.6 billion
• Employers who provide coverage through the pool: $900 million
• Hospital tax: $2.3 billion
• Federal funds: $4.7 million
• tobacco tax $1.6 billion
• Redirected county money: $1 billion
• Individual premiums to pool: $2.1 billion
• Total: $14.2 billion
:-) LOL
Yeah. Went over to Berkely a few weeks ago to watch Cal and USC play. It was a constant reminder of why I live in Nevada.
I had to go on Oxygen the whole time I was there. The sociaism was choking me to death.
:-)
Bush should have invaded Kalifornia before Iraq!
Had R'hinold kept to his potential of becoming a true conservative, I'd have been among those working to remove the barrier to foreigners running for president. As it stands, our founders were right- no foreign monkeys for president.
It's tough to out-guess the intent of the Constitution. Screw with it, and it'll screw you back. Guaranteed.
Your words exhibit some of the same wisdom the constitution bares witness was found in the founder's minds. Those dudes really thought things through, didn't they?!?
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