California’s Single Payer Plan

The editors of the Wall Street Journal chortle over the failure of the State of California’s proposed single payer plan for the state in the state’s legislature:

Democrats in the state Senate passed a bill in 2017 for a single-payer health system, but it died in the state Assembly because it didn’t include revenue to pay for the $400 billion annual cost. Last month Assembly progressives resurrected the legislation, plus an enormous tax bill to finance it.

This included a 2.3% excise tax on businesses with more than $2 million in annual gross receipts; a 1.25% payroll tax on employers with 50 or more workers; a 1% payroll tax on workers earning more than $49,900; and a progressive surtax to start at 0.5% on income over $149,509 and rising to 2.5% at $2,484,121.

These sweeping tax increases were too politically toxic even for Democrats who believe in confiscatory taxation as an article of faith. Gov. Gavin Newsom campaigned on single-payer but declined to endorse the bill. “It’s one thing to say, it’s another to do,” he said last month.

Lacking enough Democratic votes to pass the bill, progressives killed it. “I don’t believe it would have served the cause of getting single payer done by having the vote and having it go down in flames and further alienating members,” said San Jose Assemblyman Ash Kalra, the bill’s author.

They’ll try again later.

When will people recognize that practical single payer systems, higher taxes, reduced compensation for providers, and more limited consumer choice are inextricably intertwined? It remains true that there ain’t no such thing as a free lunch. Countries with high degrees of social cohesion than we have like Germany, France, Denmark, etc. and the reduced opportunism, cheating, and self-dealing that go along with that social cohesion can manage more expansive systems of social services than we can.