Badgered to a Taxing Death: Wisconsin Health Care

By July 24, 2007Health Care

The Wall Street Journal editorialists today detail the mind-boggling costs of the universal health care plan being promoted by “progressives” in Wisconsin. Cheese Headcases:

Democrats who run the Wisconsin Senate have dropped the Washington pretense of incremental health-care reform and moved directly to passing a plan to insure every resident under the age of 65 in the state. And, wow, is “free” health care expensive. The plan would cost an estimated $15.2 billion, or $3 billion more than the state currently collects in all income, sales and corporate income taxes. It represents an average of $510 a month in higher taxes for every Wisconsin worker.

Employees and businesses would pay for the plan by sharing the cost of a new 14.5% employment tax on wages. Wisconsin businesses would have to compete with out-of-state businesses and foreign rivals while shouldering a 29.8% combined federal-state payroll tax, nearly double the 15.3% payroll tax paid by non-Wisconsin firms for Social Security and Medicare combined.

This employment tax is on top of the $1 billion grab bag of other levies that Democratic Governor Jim Doyle proposed and the tax-happy Senate has also approved, including a $1.25 a pack increase in the cigarette tax, a 10% hike in the corporate tax, and new fees on cars, trucks, hospitals, real estate transactions, oil companies and dry cleaners.

The Journal rightly identifies competitiveness as one of the first things to suffer; businesses would flee to the nearest reasonably taxed state, Iowa or South Dakota, for example.

The business community is in fact up in arms. Bill Smith, director of the state NFIB, condemns the payroll tax’s regressivity. “Business owners argue a payroll tax is a regressive tax on jobs and will hurt the self-employed, small family-owned businesses, sole proprietors, and thousands of firms operating on a small profit margin. In other words, it is a guarantee that Wisconsin will never be home to the next Microsoft, or any other innovative entrepreneur.”

The Journal starts its editorial with a reference to Louis Brandeis’ bromide, “The states are the laboratories of democracy.” Perhaps. In any case, we can’t imagine there are many Wisconsinites who wants to experiment with driving all their employers out of state.

Join the discussion One Comment

  • Syd Terry says:

    Yes, but where the Journal goes wrong is suggesting that these problems are intrinsic to universal health care. They’re not; an
    alternate plan was proposed to the Assembly Committee on Aging and Long Term Care by fellows from the Roosevelt Institution, similar to the one Massachusetts already has in place would increase efficiency while driving down costs. In order to adequately reform our healthcare system, it’s necessary to look past ideological issues when crafting reform policy. Check out these students’ response to the WSJ article at http://open-doorpolicy.blogspot.com/, and check out the students’ policy proposal at http://rooseveltinstitution.org/_file/_wischealth_ppt.ppt

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