#policy + #politics

The governor's proposed 9.9% tax on income over $1 million (revenues starting 2029) is the most contentious part of the plan.

In March 2024, the Washington State Legislature adopted Initiative 2111 to prohibit state and local personal income taxes. The measure passed with support from all Republicans and a majority of Democrats in both chambers. A 9.9% tax on personal earnings conflicts with this law. The administration hasn't explained how this complies with I-2111's prohibition.

This would be Washington's 12th income tax attempt since 1932—voters rejected it 11 times. By asking approval for a millionaire-only tax, the administration establishes a graduated framework that would only need legislative modification afterward, not further voter approval.

We strongly oppose an income tax but appreciate Gov. Ferguson's promise to let voters decide. He proposes a constitutional amendment limiting it to income over $1 million, yet his proposal ignores existing constitutional limits. If adopted, this income tax will certainly expand in the future.

The budget shifts $569 million in Climate Commitment Act (CCA) revenue to fund the Working Families Tax Credit. The CCA's original allocation was meant for carbon reduction and infrastructure projects but will now go toward direct cash assistance for lower-income households.

Using rules that exempt certain bills from the filibuster, Congress passed (and President Trump signed into law) the 330-page "reconciliation" bill which included tax breaks adding $500 billion to the deficit; new limits on Medicaid, SNAP, federal student loads, and green energy; and $171 billion for immigration enforcement, making ICE the largest law enforcement agency in the United States.

Those were perhaps the most controversial bills ever enacted, with senators voting yes on the reconciliation bill representing just 44% of the country's population. I don't think that's ever happened before and really captures the political climate. (For comparison, the Affordable Care Act, a.k.a. Obamacare, passed the Senate with the yea votes representing 62% of the country’s population.)

Healthcare spending is driven by utilization (the number of services used) and price (the amount charged per service). An increase in either of those factors can result in higher healthcare costs. Despite spending nearly twice as much on healthcare per capita, utilization rates for many services in the United States is lower than other wealthy OECD countries. Prices, therefore, appear to be the main driver of the cost difference between the United States and other wealthy countries.

The U.S. spends twice as much as comparable countries do on health, driven mostly by higher payments to hospitals and physicians.

"Private insurance companies in this country spend between 12 and 18 percent on administration costs," Sanders said on NBC’s Meet the Press on Sept. 17. "The cost of administering the Medicare program, a very popular program that works well for our seniors, is 2 percent. We can save approximately $500 billion a year just in administration costs."

Is the gap between private and public health insurance providers’ administrative costs really that high? Most experts agreed the numbers looked about right. But because of key differences between Medicare and private insurance, the trade-off isn’t as simple as Sanders suggests.

If "the numbers looked about right", then why is it "half truth"?

Experts told us we could safely assume private insurance costs, on the other hand, are much higher, though actual spending estimates vary.

Aah... So it's a "half truth" because Bernie understated how much cheaper medicare is than private insurance companies.

Historically, administrative expenses were much higher in the commercial market because insurers did a lot of underwriting, or using the health status of individuals or groups to determine their premiums. The Affordable Care Act was designed to curb that spending.

On top of that, experts explained that unlike Medicare, private insurers take on more responsibility than simply paying claims or occasionally going after fraud. Before a claim is even filed, they check its appropriateness, assess whether it is medically necessary, and whether it can be done in a cheaper way (outpatient versus inpatient care, for example).

"Medicare has been trying in fits and starts to look a little more closely at how it pays claims but generally speaking, it is passive in processing claims," Sabrina Corlette, a research professor at the Center on Health Insurance Reforms at Georgetown University.

And private companies, deny more claims, which makes it more expensive.

Health expenditures per person in the U.S. were $13,432 in 2023, which was over $3,700 more than any other high-income nation.