About the same time, a similar plan by Gov. Arnold Schwarzenegger to force doctors, hospitals and businesses to foot the bill for near universal health care suffered a potentially fatal setback when the Legislature's legal adviser deemed its proposed levy to be a tax, rather than a "fee" as the governor claims. We agree that Mr. Schwarzenegger's plan to force a 4 percent levy on businesses and hospitals and 2 percent on doctors is a tax, not a fee. (A fee is typically what a user pays to contribute to a particular service that he or she benefits from directly, such as a national park admittance fee. Because there's a direct connection between fee, service and user, this is a more palatable kind of tax from a philosophical standpoint.)
The significance of the tax-or-fee question as it pertains to the Legislature is that a tax requires two-thirds approval by the Legislature. A fee can be imposed by simple majority. Without Republican support, two-thirds approval is impossible. Not a single Republican voted last week in favor of the Democrats' Senate or Assembly bills that would require businesses to either spend 7.5 percent of payroll on health coverage, or pay an equivalent amount into a state fund. (The governor's plan never even made it into bill form before last Friday's deadline as apparently no Republicans were willing to carry it.)
It promises to be a long, hot summer of negotiations as Democratic legislators and the governor try to reach agreement on their different approaches to achieve their common desire of guaranteeing health insurance coverage for everyone.
We should be leery any time the government seeks to guarantee anything, and particularly when it's for everyone.
"This massive government health care plan will hurt our state's businesses, drive up health costs, reduce choices for working families and make our budget problems even worse," said Assembly Republican leader Mike Villines. "Imposing a 7.5 percent jobs tax will force California's employers to raise prices on their customers, lay off hard-working employees or close their doors."
Republicans say the Democrat "fees" amount to the "single largest tax increase on businesses in state history."
The California Chamber of Commerce also notes that the proposed mandate that employers must provide insurance, which is common to the Democrats' and the governor's schemes, "threaten jobs and slow economic growth." Again, we agree.
We found parts of an alternative plan by Senate Republicans to be reasonable, such as changing state regulations to allow health plans and insurers more flexibility in co-payments, deductibles and reducing mandates on businesses, rather than increasing them. But those plans went nowhere in the Democrat-controlled Capitol, and Republican amendments to lessen the burdensome Democrat measure were defeated. We should, however, applaud Assemblyman Lou Correa, D-Santa Ana, the lone member of his party to join Republicans voting against the Democrat bill.
Without more like Mr. Correa, perhaps the best Californians can hope for is to block Democrats' and the governor's anti-business, anti-taxpayer tactics by denying a two-thirds vote. Nevertheless, a bill may be approved with the sleight of hand of calling its taxes "fees." If so, a court challenge and resulting appeals can be expected. We hope the courts agree that a tax by any other name remains a tax, and invalidate any damage the Legislature may inflict.
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