UPDATE: We’ve received some questions about whether this enormous tax hike is percentage points (e.g., going from 1% to 7%) or if it’s just a percentage tax hike (e.g., going from 1% to 1.06%). The horrific news is that it would be a percentage points tax hike, so an additional percentage amount on the percent paid. Here’s an excerpt from the bill’s language:
(a) A SIX PERCENT PAYROLL PREMIUM FROM EMPLOYERS FOR THE PURPOSE OF SPONSORING THE COOPERATIVE HEALTH PLAN;
(b) A THREE PERCENT PAYROLL PREMIUM FROM EMPLOYEES, OF WHICH THE EMPLOYER MAY PAY ALL OR PART OF THE EMPLOYEE PORTION OF THE PREMIUM;
(c) A SIX PERCENT EMPLOYER’S PREMIUM AND A THREE PERCENT EMPLOYEE’S PREMIUM FROM SELF-EMPLOYED INDIVIDUALS;
(d) A NINE PERCENT PREMIUM ON ALL INCOME THAT DOES NOT COME FROM COLORADO PAYROLL OR COLORADO SELF-EMPLOYMENT, EXCLUDING PENSION, SOCIAL SECURITY, CHILD SUPPORT, AND UNEMPLOYMENT INSURANCE INCOME
In practical terms, this is what the tax would look like, not including taxation on investments, on someone who makes $50,000 per year:
An employee would pay an additional $1,500 in taxes per year and their employer would pay an additional $3,000. A self-employed person who makes $50,000 per year would pay an additional $4,500 in taxes (9%).
This is amazingly problematic. We’ll report more on this in the days to come.
No, this is not an April Fools’ Day joke. Unfortunately, yet another new tax for Coloradans has been proposed by Senate Democrats to pay for a state-run insurance program. Sen. Irene Aguilar (D-Denver) has proposed a hefty tax on businesses as a constitutional amendment to put into place the first publicly-run universal health system in America, also known as SCR13-002. Here is how the tax increases would break down:
- Six percent payroll tax on employers
- Three percent payroll tax on workers
- Nine percent income tax on everyone
That translates to a nearly 18% tax increase on small business owners. Initially, when she proposed it last December, the plan called for a 6% increase in payroll taxes and 6% increase in income tax, meaning her newest proposal will cost 50% more than originally projected. That’s before the proposal has even left the gate.
For this massive increase in payments to the state, Coloradans would get universal health care similar to what’s being developed in the Colorado Health Benefit Exchange. All health care benefits would flow through a Colorado Health Care Cooperative board, which would seek exemption from federal health care laws. No money would change hands between insurance providers and subscribers – all money would flow through a state intermediary.
Aguilar is taking an unusual approach to passing her health care bill – she plans to place the proposal on the ballot to allow all Coloradans to vote for (or against) it. To get the proposal on the ballot, Aguilar would need the support of four Senate Republicans and seven House Republicans (i.e., two-thirds of the Legislature).
While Aguilar isn’t intending her legislation to be an April Fools joke, government-run healthcare is so unpopular, Republican direct mail consultants will be laughing all the way to the bank on this vote.