The California Chamber of Commerce has tagged AB 1400 (Kalra, Lee and Santiago) and ACA 11 (Kalra and Lee) as its first Job Killer bills of 2022. The bills would create and finance a new single payer health care system called CalCare.
“Single payer health care is not free health care,” said CalChamber Policy Advocate Preston Young. “AB 1400 and ACA 11 would not only ruin quality health care delivery in the state but create the largest tax increase in state history. Successfully standing up a new function that would be twice the size of the existing state budget is highly doubtful, given the state’s recent experience with benefit delays and massive fraud in the unemployment system.”
According to a letter sent yesterday by CalChamber to the bills’ authors, if ACA 11 were enacted, California’s top personal income tax rate for individuals and sole proprietors—already the highest in the country—would increase by 2.5%. Additionally, ACA 11 would implement a payroll tax of 1% of the aggregate amount of wages or other compensation paid by the employer to resident employees in excess of $49,900, and a gross receipts tax of 2.3% on businesses with more than $2 million in gross revenues.
“Certainly, the kinds of tax increases necessary to finance AB 1400 would detrimentally impact California businesses and discourage companies from growing or relocating here,” said Young. “It would likely lead to significant layoffs or relocations as existing businesses and employers would be forced to cut costs to sustain the added new tax burden.”
Proponents of the measure recently indicated that the cost of tax increases required for this single payer health care to be between $160–$170 billion. Prior versions of similar single payer proposals were estimated to cost more than $400 billion, including existing state and federal tax contributions.
California voters have twice rejected a government-run health care system at the ballot box—in 1994 and 2004.
Currently, 94% of Californians have health care coverage in some fashion. A majority of the uninsured population is comprised of undocumented individuals. Governor Gavin Newsom’s budget proposal addresses this very issue and would make California the first state to offer health care coverage for all income-eligible residents regardless of immigration status.
Staff Contact: Preston Young