Did Gov Cooper Raise Taxes Yesterday?
January 5, 2017 1 Comment
Governor Cooper announced yesterday that he would expand Medicaid via an Executive order, setting up a legal dispute with the North Carolina General Assembly which in 2013 passed a law saying the State would not expand. Leaders in the General Assembly announced they would ask Congress and “Federal Officials”–presumably in the Center for Medicare and Medicaid Services (CMS) to deny the request. I don’t know how this will play out, but it represents the new Governor making clear his policy preference in this area.
Speaker of the N.C. House Tim Moore, and Majority Leader John Bell (from my hometown of Goldsboro) took another tack in criticizing the move, and said the Governor was raising taxes by his proposed action.
“Gov. Cooper proposed raising taxes on North Carolinians today, just over 72 hours into office.”
This is not true for the federal cost of Medicaid expansion (95% this year, dropping to 90% in 2020). No tax provisions were changed yesterday, nor will they change if North Carolina expands Medicaid (or does not expand Medicaid for that matter).
The Affordable Care Act (Obamacare) did raise a variety of taxes to pay for Medicaid expansion (full list of taxes, and credits related to ACA from IRS). On January 1, 2013, North Carolinians with salary or self employment incomes over $200,000 for individuals, $250,000 for couples had a tax increase of 0.9% levied on the amounts above these thresholds. In addition, a tax on investment income (Dividends and capital gains) above $200,000/$250,000/year for individuals or couples of 3.8% also went into effect on January 1, 2013. Taxpayers in all states with salary and investment income above these thresholds have been paying increased taxes for 4 years, but so far North Carolina has not taken advantage of these monies to expand Medicaid in our state.
How about the State share of expansion costs?* Governor Cooper proposed that Hospitals and Health Systems in North Carolina pay for the States portion of Medicaid expansion. You could call that a tax if you want, but its worth noting that the hospitals have never been so ready to pay up. The hospitals will gladly pay the State’s expansion costs since they will benefit greatly from the increased revenue that will flow to them as a result of North Carolinians who would become covered by Medicaid expansion. Hospitals take care of our fellow North Carolinians who are uninsured when they get sick now. Expansion would mean there far fewer such persons in our State.
*I have a commentary piece in the next issue of the North Carolina Medical Journal that gives lots more detailed arguments, but I can’t put that out prior to publication. Hopefully it will be out in the next couple of weeks.