There’s a constitutional amendment in front of the state legislature that would raise taxes astonishingly higher to fund the first single-payer healthcare system in the U.S.
Jared Walczak of the Tax Foundation broke down what the taxes would entail:
For starters, the payroll tax doesn’t apply to companies with fewer than 50 employees. At that 50th employee, the massive taxes hit hard.
Walczak explains:
Needless to say, this disincentivizes small business growth.
The corporate gross receipts tax hurts even successful businesses with low profit margins, like grocery chains, and it’s disastrous for businesses operating at a loss.
Jared Walczak of the Tax Foundation broke down what the taxes would entail:
There are some catches in this proposal, and they’re notable.The new taxes would take three forms:
- Surtaxes atop the current individual income tax structure beginning at $149,509 in income;
- A graduated-rate payroll tax system with the top rate kicking in for employees with more than $49,990 in annual income; and
- A gross receipts tax of 2.3 percent, excluding the first $2 million of business income.
For starters, the payroll tax doesn’t apply to companies with fewer than 50 employees. At that 50th employee, the massive taxes hit hard.
Walczak explains:
Imagine, for instance, the overly simplified hypothetical of a company with 49 employees making $80,000 each. At 49 employees, the company has no payroll tax burden. Hiring one additional employee generates a tax bill of $90,000—more than that employee’s salary!
Needless to say, this disincentivizes small business growth.
The corporate gross receipts tax hurts even successful businesses with low profit margins, like grocery chains, and it’s disastrous for businesses operating at a loss.