Before it even boomed in the Northeastern Marxist enclave known as Vermont, the Green Mountain state’s experimentation with socialized medicine went bust.
According to a lengthy article in the Wall Street Journal, Vermont’s left-wing governor Peter Shumlin announced last week that, due to the expense and the damage it would do to the state’s economy, he “would no longer create America’s first statewide single-payer health system.”
They hired William Hsiao of Harvard and Jonathan Gruber of MIT as policy architects. The former economist created Medicare’s price controls in the 1980s and as for the latter, well, he’s the guy who famously thinks you’re stupid.
Under the Vermont plan, all 625,000 state residents were to be automatically enrolled in the government plan, with the same benefits for all. As with Medicare, employers would be subject to a payroll tax that would reduce wages, and workers would pay a premium based on a sliding income scale.
Though businesses were allowed to continue to sponsor insurance or buy more generous supplemental benefits, in practice few could have afforded to do so.
If Mr. Shumlin would give to each according to his need, he would take from each far more than his ability to pay. The state accountants estimated that his plan required an 11.5% tax on worker payroll, with no exceptions.
Individuals, meanwhile, would have paid as much as 9.5% of earnings, which would have applied to everyone making more than four times the poverty level, or $102,220 for a family of four—hardly the 1%. The full $2.59 billion in necessary funding would roughly double current state revenues (about $2.85 billion today).
Even Mr. Shumlin called such a tax wallop “in a word, enormous” and “the risk of economic shock is too high at this time to offer a plan I can responsibly support.” Vermont already collects a top income tax rate of 8.95% that is the country’s seventh highest, as well as a 6% sales tax and 8.5% on corporate income.
In the fantasy world of socialist ideology, economic reality can often be a sobering plot spoiler.
Read the whole article at the Wall Street Journal..
Image credit: Socialism for Dummies and Hipsters