The senator has introduced S.252 in the Vermont Senate as proposed financing of ShumlinCare (Green Mountain Care). It seems Senator Peter Galbraith is calling Gov. Shumlin's bluff.
Act 48, Sec. 9. Financing Plans directs that financing plans be prepared and submitted to the legislature by Jan. 15, 2013.
Sec.9. FINANCING PLANS
(A) The secretary of administration or designee shall recommend two plans for sustainable financing to the house committees on health care and on ways and means and the senate committees on health and welfare and on finance no later than January 15, 2013.
This is a law which the Governor continues to ignore. He continues to refuse to release a study paid for by taxpayers which, reportedly, shows that Shumlincare is not fundable. Unfortunately, when a legislative body is of the same party as the governor, they set aside their responsibility to the public to demand that the law be obeyed. The governor is free to, essentially, continue breaking the law.
By Sen. Galbraith's calculations, financing of Shumlincare will require a minimum of $1,600,000,000. To extract this sum from Vermont residents will require one of several tax proposals:
An employer-paid 11% payroll tax on all employees, including out of state employees, plus a 2% tax paid by employees. This would include schools and municipal governments (which, of course, would get passed on to taxpayers), and ERISA businesses (self-insured companies, e.g. IBM, GE, C&S). In addition, non-wage income (interest, rent, dividends, rent and capital gains) would be taxed at 10%. Self-employed would pay 13%. The cap would be the same as it is for FICA, $113,700 (although the FICA cap increases to $117,000 for 2014). There would be no deductions for home mortgage interest, charitable deductions, etc.
a 19.5% Sales Tax (includes present 6% Sales Tax) but with no exclusion for food or clothing and expanded to include all services.
an Income Tax starting at 15.5% and rising to 24.4%.
It's almost as though our neighbors to the east helped write Green Mountain Care. Any of these proposed funding mechanisms will drive businesses to New Hampshire, and certainly will discourage new businesses from coming to Vermont. Businesses along the border will lose business as more people cross the border (on all four sides) to avoid a 19.4% sales tax. More wealthy seniors will relocate their legal residences to Florida or other non-income tax states. Those who think Vermont would be a better place to live with a smaller population will get their wish. However, the few left will have a bigger burden to pick up to make up for those who leave.
It seems that Gov. Shumlin owes us a detailed explanation of his proposal to fund his health care plan without delay.
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