California could double its taxes
California voters may have the opportunity to vote on a tax hike that backers say will help fund health care coverage for state residents – in other words, a first of its kind single payer health care system that the left has long dreamed of.
As the Tax Foundation notes, the proposal would double the state’s already high taxes to fund all that health care:
The top marginal rate on wage income would soar to 18.05 percent—nationally, the median top marginal rate is 5.3 percent—and the state would adopt a new 2.3 percent gross receipts tax (GRT), at a rate more than three times that of the country’s highest current pure GRT.
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.
Naturally, it’s full of problems. For example:
…the payroll tax exempts employers with fewer than 50 resident employees, punishing small businesses for expanding and creating a meaningful tax cliff. Imagine, for instance, the overly simplified hypothetical of a company with 49 employees making $80,000 each. At 49 employees, the company has no payroll tax burden. Hiring one additional employee generates a tax bill of $90,000—more than that employee’s salary!
California is indeed at the cutting edge of policies that destroy economic opportunity and growth. No wonder it lost a congressional district after the 2020 census -for the first time in its history.