In early January, Governor Jerry Brown called on legislators to approve a revamped multi-billion dollar tax on healthcare organizations (the “MCO” tax). Surprisingly, some Republican legislators are considering casting a vote in support of this healthcare tax. It is very likely that the vote on the Governor’s proposal will take place today in Sacramento.
Here are eight reasons why GOP legislators should vote against the tax increase:
1) With record-sized mega-budgets, California’s government is not suffering from a revenue problem. The reality is that there are more than enough tax revenues currently to fund programs for developmentally disabled persons — but once again the majority party is using that important issue as political football (as with transportation infrastructure funding), choosing not to fund something unless Republicans prostrate themselves.
2) This managed care organization tax is the poster child of a tax that should end. Its current iteration was authored for three years in 2013 on a party line vote. Not one Republican legislator voted for it. If there were more Republicans it wouldn’t have passed at the time. It stands to reason that with Republicans picking up seats in the 2014 election it should go.
3) Tax dollars should be used responsibility, whether they reside in the state or federal treasury.The federal government is offering money to California if it passes this tax, which would continue to fund the expansion of Obamacare in California. That’s against the original intent of the Framers of the Constitution, and bad policy.
4) The process is rushed and the consequences unknown. As State Senator John Moorlach (R-Costa Meas) says:
Unfortunately, we have not been provided with the details on how the bill will impact the for-profit health care providers. One problem is that their tax information is proprietary and unavailable. The other problem is that no one can predict what their premium taxes and taxable income will be for the next two years. Consequently, no one knows if the bill is good for consumers, the for-profits or the State of California’s net tax revenues. I know it is nice to assume that it will all work out. But, this is a very complex arrangement that deserves a less rushed analysis.
5) There is nothing more credible than an insurance company executive “promising” insurers won’t use the new tax as an excuse to raise rates. (Apparently, such assurances have been given.)
6) There is something particularly unseemly about a deal that involves the approval of a lift of pork barrel spending in order to secure the votes of particular members – ranging from fire mitigation funding of over $100 million for some rural counties, to big bucks for a medical school at U.C. Merced. There are also millions for the Labor Institutes at U.C. Berkeley and U.C.L.A., and a cool million for the Wildlife Health Center at U.C. Davis. And the list goes on…
7) As President Reagan was famous for saying, “When you are explaining, you are losing.” — Regardless of whether you choose to think of this as a tax increase or not (it has been portrayed as a mere replacement for a tax that already exists and is expiring), that is exactly how it is and how it will be portrayed. Will you have twenty minutes with a white-board with each of your constituents to explain your vote when the rates go up?
8) This is as simple as it gets. The current multi-billion dollar MCO tax will expire in just a few months. There’s only a new health care tax if you vote for one.
Jon Fleischman is the Politics Editor of Breitbart California. A longtime participant, observer and chronicler of California politics, Jon is also the publisher at www.flashreport.org. His column appears weekly on this page. You can reach Jon at firstname.lastname@example.org.