When Louis Brandeis praised the 50 states as "laboratories of democracy," he didn't claim that every policy experiment would work. So we hope the eyes of America will turn to Wisconsin, and the effort by Madison Democrats to make that "progressive" state a Petri dish for government-run health care.
This exercise is especially instructive, because it reveals where the "single-payer," universal coverage folks end up. Democrats who run the Wisconsin Senate have dropped the Washington pretense of incremental health-care reform and moved directly to passing a plan to insure every resident under the age of 65 in the state. And, wow, is "free" health care expensive. The plan would cost an estimated $15.2 billion, or $3 billion more than the state currently collects in all income, sales and corporate income taxes. It represents an average of $510 a month in higher taxes for every Wisconsin worker.
Employees and businesses would pay for the plan by sharing the cost of a new 14.5% employment tax on wages. Wisconsin businesses would have to compete with out-of-state businesses and foreign rivals while shouldering a 29.8% combined federal-state payroll tax, nearly double the 15.3% payroll tax paid by non-Wisconsin firms for Social Security and Medicare combined.
This employment tax is on top of the $1 billion grab bag of other levies that Democratic Governor Jim Doyle proposed and the tax-happy Senate has also approved, including a $1.25 a pack increase in the cigarette tax, a 10% hike in the corporate tax, and new fees on cars, trucks, hospitals, real estate transactions, oil companies and dry cleaners. In all, the tax burden in the Badger State could rise to 20% of family income, which is slightly more than the average federal tax burden. "At least federal taxes pay for an Army and Navy," quips R.J. Pirlot of the Wisconsin Manufacturers and Commerce business lobby.
As if that's not enough, the health plan includes a tax escalator clause allowing an additional 1.5 percentage point payroll tax to finance higher outlays in the future. This could bring the payroll tax to 16%. One reason to expect costs to soar is that the state may become a mecca for the unemployed, uninsured and sick from all over North America. The legislation doesn't require that you have a job in Wisconsin to qualify, merely that you live in the state for at least 12 months. Cheesehead nation could expect to attract health-care free-riders while losing productive workers who leave for less-taxing climes.
I've never lived in a place, and this is including Washington, DC, where I've payed more in taxes for less service then in Wisconsin. For example, when I first moved to the state and was changing the title on my car I was shocked to find such an antiquated system. It took 6-8 weeks to get a new title through the mail. It was like stepping into a time warp since the last time I saw such a system was in Missouri in the 1980's. Overall, the tax burden here is huge. I'd say Wisconsin is "nickle and diming" me to death, but it is more like "ten and twenty-ing" me dry, and wherever the money is going none of it is being used to update the DMV.
Very little of the money seems to be going to higher education either. As this story makes clear, professors are leaving the University of Wisconsin at Madison in droves.
University of Wisconsin-Madison has long been an attractive target for elite schools like Harvard and Stanford looking to steal faculty. But Arizona State? Pittsburgh? Florida State?
Dozens of UW-Madison professors left in the past two years, and Chancellor John Wiley said a growing number of them are going to schools that traditionally could not compete with his campus. More than 115 professors reported receiving outside offers last year, the most in 20 years and more than double the number from five years ago.
The trend has alarmed Wisconsin administrators who say some departments are in a crisis after losing prominent teachers and researchers. At stake, they say, are the quality of the state's flagship university, which has traditionally ranked among the nation's top public schools, and coveted research dollars.
Faculty members say the departures accelerated as professors' salaries hit rock bottom among their peers and morale sagged amid budget cuts.
So the state's plan seems to be to offer universal health care to the indigent of the nation so they can take advantage of the state's soon-to-be third-tier university.
Yeah, that makes sense.
At least I have a choice. I prefer not to commute, but Minnesota is just 15 minutes away. I'm sure other folks around the state are eyeing Iowa and (gasp) Illinois with envy as well.
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