Shumlin Payroll Tax to Fund Single Payer Unpalatable to Business

By Andrew Stein for

If Gov. Peter Shumlin pursues a payroll tax to fund a publicly financed health care system, he will meet heavy resistance from one of the state’s most influential business groups.

Betsy Bishop, president of the Vermont Chamber of Commerce, says her organization and its members would not look favorably on a payroll tax.

“When you take away the decision-making process, but leave the payment still in place, it disconnects the employer from the payment,” she said. “What we’re interested in is continuing a system where employers, if they are paying for health care, have some level of control over what they are paying for.”

Last week, Shumlin told Times Argus Editor Steve Pappas that a payroll tax would be one of the vehicles for funding a single-payer, universal health care system in Vermont. Shumlin has been touting single payer for years, but he has provided little detail to date about how the state would pay for the system.

“Clearly, the payroll tax is going to have to play a major role,” he told Pappas.

Shumlin’s Office of Health Care Reform is working on a financing plan to raise an estimated $1.61 billion for the system, and the governor says he will hand the plan to the Legislature in January 2015. The state would not be eligible for a waiver from the Affordable Care Act to implement a single payer plan until 2017.

“Opponents are going to say this will be the biggest tax increase in Vermont history — fair enough,” Shumlin told Pappas. “But it’s going to be the biggest health care premium reduction in American history. We’re just going to swap a health care premium for a publicly financed health care premium.”

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