BRATTLEBORO — Sen. Peter Galbraith, D-Windham, has introduced S.252 in the Vermont Senate as proposed financing of ShumlinCare (Green Mountain Care). It seems Sen. Galbraith is calling Gov. Shumlin's bluff.
Act 48, Sec. 9 of the state health-care reform law, passed in 2011, directs that financing plans be prepared and submitted to the legislature by Jan. 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, essentially, free to continue breaking the law.
By Sen. Galbraith's calculations, financing of Shumlincare will require a minimum of $1.6 billion.
To extract this sum from Vermont residents will require one of several tax proposals:
• An employer-paid 11-percent payroll tax on all employees, including out-of-state employees, plus a 2-percent tax paid by employees. This would include schools and municipal governments (which, of course, would pass these expenses to taxpayers), and businesses that are self-insured under Employee Retirement Income Security Act, IBM, GE, C&S).
In addition, non-wage income (interest, rent, dividends, and capital gains) would be taxed at 10 percent. Self-employed people would pay 13 percent. 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 contributions, etc.
• Or a 19.5-percent sales tax (including the present 6-percent sales tax) but with no exclusion for food or clothing and expanded to include all services.
• Or an income tax starting at 15.5 percent and rising to 24.4 percent.
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-percent sales tax. Wealthier 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.