Butte County Republican Party

Shift the tax benefits for employer-provided insurance to all workers, with a refundable tax credit of $2,300 per individual, $5,700 per family. They can keep what they have or pick their own insurer. If they have private coverage already this would alleviate the costs.

States could join others to form regional Health Insurance Exchanges that would expand insurance options. (California currently prohibits out-of-state insurance companies from entering the market, which restricts competition and inflates prices.) The exchange would be open to everyone, regardless of their health condition. Those with serious illnesses, previously uninsurable, would be charged what they can pay based on income. Those on Medicaid would receive additional funds to help pay for private insurance, like a health insurance voucher. This would enable them to receive the same private coverage and care as everyone else.

Health Savings Accounts have been available since 2005. Money saved by getting insurance with a high deductible can go into a health savings account, tax free, and can be used to pay for expenses below the deductible. The patient is paying with effectively his own funds, and therefore will avoid unnecessary care and expenses, and shop for doctors that can provide quality care for less.

— Mary Kennedy, Chico

Mary Kennedy is a member of the Butte County Republican Party and past President of the Chico Republican Women Federated.

California’s Arnold Schwarzenegger shocked nearly everyone in Sacramento last week when he endorsed a flat tax for the state. Or did he? His exact statement was that a “15% straight tax” is “the radical, daring kind of a proposal that I want to see on the table.”Gulp. 15 percent! The top tax rate right now is only 10.5%. When I asked the governor’s press office about the statement, they assured me, “The governor has not decided on a specific rate. He has only said he likes the concept of a flat tax.”

To make sure the point was entirely clarified, Mr. Schwarzenegger sent me an email on Thursday, in which he explained: “The way we collect revenues in California is so broken that we must look at every bold proposal out there, no matter how daring or radical — including the idea of a flat tax. California’s budget is so volatile because the top 1 percent of taxpayers provide 50 percent of all our personal income tax revenues, so we set up a commission to give us ideas, and a flat tax is absolutely an idea that must be on the table with many others.”

This week the governor’s tax reform commission, headed by Gerald Parsky, will preview some of the recommendations to be released in a full report in July. Mr. Parsky confirmed in a conversation that a “tax rate of about 6% with few deductions could replace the steep tax rates we have now.” That’s a lot lower than 15% — thank goodness. Mr. Parsky also said that “even many Democrats now concede that the tax system is flawed by imposing so much of the burden on the richest 1% of Californians.”

We have also learned the state may try to replace its state business income tax with a broad based business transfer tax of about 6%. This would bring California down from No.2 to about the middle of the pack in terms of how heavily the state taxes business. That makes sense since California has been chasing out its rich people and employers who pay so much of its taxes.

Dan Logue, a Republican assemblyman from Northern California who is heading up a task force on taxes, tells me that the tax system is so “harmful to business” that states like Colorado are now advertising their low business taxes of less than 5% to get businesses to relocate. “Our tax system is killing our state,” he complains. The good news is that the Terminator now seems to agree with him.

– Stephen Moore

View Original Story