A proposal to implement universal health care in New York would require a tax increase of “historic proportions” to cover 20 million residents. That’s according to an analysis of the bill by a free-market public policy institute.
Empire Center released its analysis of “unprecedented tax increases” that would come with The New York Health Act, a bill proposed by Assembly Health Committee Chairman Richard Gottfried, D-Manhattan, and Senate Health Committee Chairman Gustavo Rivera, D-Bronx.
Their bill calls funding the health-care program through two new taxes. One would be a graduated payroll tax where companies would pay at least 80 percent of the amount. The other would be a progressive levy placed on income, including capital gains.
Citing figures from the RAND Corporation, the first-year cost for the program would be $157 billion, which would be a 133% increase in state tax receipts.
“In other words, a state with some of the heaviest taxes in the country would be much more than doubling what it collects from individuals and businesses in a single stroke,” the report states.
Empire Center pointed out that the largest tax increase by the federal government was one initiated 80 years ago to help fund the cost of World War II. That 1942 tax increase represented roughly 5 percent of the country’s gross domestic product. A $157 billion tax increase would equate to 8.4 percent of New York’s GDP.
The report notes that some families and businesses would save money, thanks in part to no more out-of-pocket premium expenditures. Roughly two-thirds of New Yorkers would pay less, Empire Center said.
The impact on businesses would vary. Those that currently do not offer insurance to their employees would be faced with paying 80 percent of a payroll tax. Others that provide insurance plans could see their costs go either way, depending on payroll costs.
“Lower-paying chain stores and fast-food enterprises would be more likely to save money,” the report states. “Higher-paying employers – medical practices, law firms, investment companies, high-tech start-ups – would tend to pay more.”
The bills also note that the self-employed would be responsible for 100 percent of the new payroll tax on their income.
The report showed New Yorkers paid the second-highest per capita state and local tax amounts in the U.S. In 2018, that amount was $9,829 – more than 1.8 times the national average of $5,392. Based on Empire Center’s analysis, the per capita rate with a single-payer health-care plan, the tax per capita would nearly double to more than $17,600.
“Switching to a fully government-run, taxpayer-financed health plan would be a profound step no other state has successfully taken,” the report states. “It would affect both the physical health and economic well-being of every New Yorker.”
However, proponents of the health-care for all plan say it’s vital that New York step up and provide insurance for all residents. That includes roughly 1 million residents – and about 150,000 immigrants, according to supporters – who currently go without coverage. For Gottfried, who is retiring from the Assembly after 52 years this year, it’s a cause he’s championed for decades in the legislature.
On Wednesday, supporters rallied in Albany to encourage lawmakers to put the universal health care plan in the state’s budget, which is due to be passed at the end of the month.
“We will be persistent,” Assemblywoman Nathalia Fernández, D-Bronx, said at the event organized by Make the Road NY. “We will knock on that door every day because your life matters. Everybody deserves to be seen and serviced through this budget… Coverage for all is the right thing to do.”
This article was originally posted on ‘Historic’ tax awaits within the details of New York universal health care proposal