A state ballot measure that would create universal health care, dubbed ColoradoCare, has been likened to Medicare because it would be funded by a payroll tax. But other kinds of income also would be hit by added taxes.
Residents would a pay 10 percent tax on all income that is taxable on federal income tax forms, ColoradoCare spokesman Owen Perkins said.
“Most of the Social Security and retirement income is exempt from tax,” he said.
But investments, real estate, business income that is reported on personal tax forms and some retirement income would be subject to the tax, said Edmond Toy, an expert with Colorado Health Institute. This would be in addition to the payroll taxes that have received most of the attention in discussions and publicity about the ballot proposal. The payroll tax requires employers to pay 6.66 percent of their total payroll and employees would pay 3.33 percent of their wages.
The self-employed would pay the full 10 percent.
Opponents say the tax burden is too great. But supporters say many people would save money, and it would improve access to health care.
Federal tax exemptions could lessen the total tax paid on nonpayroll income.
For example, those 55 to 64 would not pay taxes on the first $20,000 of retirement income. Those 65 and older would not pay taxes on the first $24,000, according to the state ballot booklet.
Unemployment compensation and alimony also would be exempt.
ColoradoCare applies to the first $350,000 of taxable income an individual earns and the first $450,000 a couple earns.
The new single-payer insurance system could take over Colorado’s Medicaid system and receive money from the federal government to run all Medicaid programs.
If ColoradoCare did not receive the money from the federal government, it would not be formed, according to the initiative.
“That’s a very responsible and comforting standard we have to meet,” Perkins said.
If the measure is approved by voters in November, ColoradoCare would function as insurance and would negotiate with doctors and hospitals on rates, Perkins said.
Residents would be able to pay for private insurance, in addition to ColoradoCare, if they want to, Perkins said.
ColoradoCare would not have deductibles, but it could require co-payments, according to the state ballot booklet.
Any effort to raise ColoradoCare taxes would require a vote of the residents in the state. The board could ask for a tax increase to fund the insurance only once a year, according to the initiative.
The state-based insurance would cover all residents of Colorado, this includes aspiring citizens and people here illegaly, Perkins said.