Health Advice



Democrats propose California universal health care, funded by new income and business taxes

John Myers, Los Angeles Times on

Published in Health & Fitness

A spokesperson for the governor didn’t immediately respond to a request for comment on the new effort. But Kalra, a San Francisco Bay Area Democrat who has lined up support from a group of Democratic lawmakers, reminded those in attendance at a state Capitol event Thursday of the governor’s campaign platform.

“Doing nothing is not inaction,” Kalra said of political promises that have not produced a plan. “It is, in fact, the cruelest of actions while millions suffer under our watch.”

The plan’s proposed tax increase might present the most difficult political hurdle: As a constitutional amendment, it would require a supermajority vote in both the state Senate and Assembly and then ratification by voters in either the June or November statewide election. While Democrats have held a supermajority of seats in both houses for the better part of a decade, they have rarely found enough support within their ranks for a broad-based tax increase.

The constitutional amendment would impose a new excise tax on businesses equal to 2.3% of any annual gross receipts in excess of $2 million. A new payroll tax would also be created, equal to 1.25% of total annual wages and collected from businesses employing 50 or more people. An additional payroll tax would be required for employers with workers earning more than $49,900 a year.

All but the lowest-earning Californians would also be required to pay more in taxes. The proposed constitutional amendment would raise personal income taxes on salaries above $149,509 a year — less for those at that level, more to be paid as income goes up. All Californians reporting an annual taxable income of more than $2.5 million would see a new 2.5% surcharge. And personal income tax increases to pay for the health care plan could rise with inflation in future years.

The size and impact of the tax increase will be at the center of the debate. Kalra and other supporters insist the taxes will total less than what employers and Californians now pay for private insurance.


Rob Lapsley, president of the California Business Roundtable, said the proposal would impose a financial burden on those struggling with the economic impacts of the COVID-19 pandemic, and most Californians can currently receive medical treatment when needed.

“California already has near-universal health care coverage,” Lapsley said in a statement. “AB 1400 would eliminate health care options and force everyone into an untested government-run program.”

The constitutional tax increase was introduced this week, while AB 1400 was introduced last year. As a holdover proposal from 2021, it must clear the Assembly by Jan. 31. Republicans were quick to pounce on the procedural changes approved by Democrats on Thursday to fast-track the bill, which has sat for months in the Assembly without any public hearings.

“The Legislature’s majority party just voted to move a radical single-payer bill forward without an independent cost analysis,” said GOP Assemblyman Jordan Cunningham of Paso Robles, vice chairman of the Assembly Rules Committee.

The bill will be considered next week by the Assembly Health Committee. The panel’s chairman, Democratic Assemblyman Jim Wood of Santa Rosa, said Thursday that he would vote in favor of the single-payer plan, a strong indication the measure will receive a vote by the Assembly where it needs only a simple majority to be sent to the Senate.

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