00:00Today, I'm going to explain why Governor Gavin Newsom might be about to sign what the California
00:05Taxpayers Association is calling the largest tax increase in dollar amount in California's history.
00:12It starts with a tax on healthcare insurance premiums, both public and private. The public
00:18one is Medi-Cal, which is the state's version of Medicaid. Right now, the taxes are much higher on
00:23Medi-Cal than on your private insurance premium, and that's because nobody notices. Every dollar
00:29that is taxed in California gets reimbursed by Washington. Well, Washington decided it didn't
00:35want to pay anymore, and President Donald Trump and the Republican Congress decided to end that
00:39practice and to require taxes on private and public health insurance to be equal. So rather than cutting
00:45the spending on Medi-Cal or add in a work requirement that Democrats have opposed, California is raising
00:52the taxes on private health insurance premiums to cover the funding shortfall. Now, it's not clear
00:58yet what that will cost the individual patient. It depends on how the insurance companies handle
01:04it, but some estimates are that it could cost as much as $400 per premium per year. That's one tax
01:11increase. Also in the same bill, which is the state's budget, is another tax increase which comes from
01:18software. The new budget declares that software is personal property, and therefore transactions involving
01:24software are going to be taxed. The estimate is that it'll raise about $2 or $3 billion, but the
01:30California Taxpayers Association says the real amount is much higher. And in total, these two taxes will
01:36raise $14.25 billion. That's the California Taxpayers Association estimate, making it much higher
01:43than Proposition 30, which passed in 2012, raising taxes on the state's highest earners. That brought in
01:49about $6 to $8 billion. Why are these taxes increasing at a time when voters care about
01:56affordability? California has a spending problem. It doesn't have a revenue problem. AI and economic
02:01growth have brought in a lot more revenues than anticipated. But the cost of health care and
02:07education funded by the state just keeps rising, and there's no political will in the Democratic-dominated
02:12state legislature to tackle that. So they're trying to tax private insurance and private consumers any
02:20way they can, just like they let the gas tax keep rising, any way they can find revenue. They're
02:25looking for coins in the couch instead of slashing their spending. And that's why you could be about
02:31to experience the largest dollar amount tax increase in the history of the state of California.
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