Two state legislators seem determined to make things worse for New Yorkers already dealing with higher living costs.
The bill is enthusiastically supported by state Assemblyman Erik M. Dilan, D-Brooklyn, and state Sen. Timothy M. Kennedy, D-Buffalo. They believe the money generated by this tax should help health care facilities that are struggling financially.
“By passing this important policy, we’d be guaranteeing that critical health care dollars stay in New York as we rebuild from the COVID-19 pandemic — and that if out-of-state health insurers choose to take those profits elsewhere, they’ re going to pay a price,” Kennedy said, according to a story published May 9 by Spectrum New 1 in Syracuse.
The proposal has its opponents, and for good reason. If insurance companies face such a crushing new tax, who will ultimately have to pay it? Their customers, which means all the rest of us.
There is no doubt that this tax will be passed on to businesses and individuals who hold health insurance plans. Our premiums will increase, thus adding to the burden we’re already feeling because of inflation.
“This bill is particularly dangerous for the business environment in New York for it signals to businesses throughout the country that New York is willing to target and over-tax specific industries. This tax on dividends and transfers is an unprecedented double-taxing of earnings and would not go unnoticed around the country. This is tantamount to advertising to businesses in and outside of New York to not do business here,” a May 9 statement by The Business Council declared. “Further, and equally important, this bill is on its face unconstitutional. It creates a discriminatory tax system that imposes higher tax rates on dividends, payments or loans issued to out-of-state individuals or entities than it does on comparable payments made to New York entities. This is a textbook violation of the Commerce Clause of the United States Constitution, which itself and through caselaw specifically, expressly prohibits states from discriminating against interstate commerce by imposing tax structures that would provide a direct commercial advantage to in-state business, which this bill so clearly does. Additionally, the bill violates the Equal Protection Clause of the 14th Amendment by favoring its own residents over other Americans.”
“[T]axes on health insurance are already too high for New Yorkers, totaling more than $6 billion a year that adds well over $1,000 to premiums for the average family, and the state has sufficient surplus if it wants to increase funding to hospitals. Rather than imposing a new 9.3% tax on health plans, the focus should be on utilizing existing taxes, fees and assessments more efficiently to support financially struggling hospitals.”
These Democratic legislators are blinded by the dollar signs in their eyes to see the harm this bill would cause. They don’t like how private companies spend their own revenue — for which they’ve already been taxed. The lawmakers have different plans for money that others have generarted.
Rather than keeping this revenue within the state, the Reinvest in NY Healthcare Act would inflict more hardship on New Yorkers. Don’t let them add to the problem of inflation by passing this bill.