Higher wages for workers at private hospitals? Voters in Duarte and Inglewood to decide how much to tax their employers.
The issue of whether to tax employers’ profits has come to the fore amid a national debate between local and state politicians over how to improve health care services for the uninsured and low-income Americans.
Under a constitutional amendment approved last December, California voters will decide whether to tax corporations to raise the state’s minimum personal income tax rate from the current 3.25 percent to something higher. Voters in Inglewood and Duarte will decide whether to extend that income tax to private employers.
According to the California Association of Business, the state’s employers paid about $1.9 billion in federal income taxes in 2011. More than half of the tax money went to employee payrolls, and the state is already collecting about $300 million more a year in taxes from businesses than it is spending for other state government health programs.
But advocates of a broader tax on employers, who say employers shouldn’t pay more in taxes than they already do, counter that employers already pay more in taxes through various government programs, such as unemployment insurance, workers’ compensation and corporate income taxes.
“I understand why the employers may be nervous,” said Ed Hoerner, director of California Advocates for Health Equity. “The truth is it’s not that complicated. Taxation is about raising revenue.”
There’s no question taxes have to be raised on corporations, but the key question is how much they should be raised. A broad tax, he said, would mean that employees and employers would have to take on higher tax obligations that would ultimately hit their bottom lines even if the extra dollars they earned were spent on other things such as higher school and medical expenses.
“If you’re making a lot of income, it means you’re spending a lot,” Hoerner said. “But it’s not about how much you’re spending.”
To illustrate the issue of the tax on employers, the state Institute of Business Research will be hosting a panel of experts on Tuesday at 6:30 p.m. in Sacramento. Panelists will include Kevin Murphy, former president and CEO of the California State Teachers’ Retirement System; Peter W. Kaufman, a tax lawyer