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Sic Semper Tyrannis

Tuesday, March 11, 2008

Good questions on the hospital tax

Owen at Boots and Sabers has some great stuff on Gov. Doyle's hospital tax (original links included):

But what I’m more curious about are the numbers. They sure seem to move a lot.

During the budget, Doyle proposed a 1% tax. It was projected to rake in $418 million and attract another $568 in federal revenue. He proposed increasing the hospital payments by $700 million, thus leaving $286 million in cash for the government’s coffers.

Just a few weeks ago, Doyle was talking about a $400+ million tax increase, so he was probably referring to his original proposal. But in those comments he said that it would attract $450 million in additional federal revenue. That’s a far cry from the $568 he projected during the budget.

In this repair bill, Doyle is proposing a 0.7% tax on hospitals (instead of the 1%). If a 1% tax would have raised $418 million, then a 0.7% tax should raise about $292.6 million. But Doyle is saying that the tax will now attract $700 million in additional federal revenue instead of the $568 million or $450 million he projected before. With the new proposal, he expects $125 million to be left over for the general fund, so he must be planning on spending $867.6 million more with the hospitals - up from the $700 million he proposed before. If compared to his previous hospital tax proposal, this one would generate less revenue, but attract more federal revenue, and would pay more to hospitals. That doesn’t make sense at all.

Is he just making up numbers?
That's great work, especially from someone with a real day job. I wonder if we'll see the answers.

And here's another question: from where does this federal money come? Is it just sitting in some account someplace? In some Cabinet secretary's couch? Or does some other state/program lose that money because it comes to us, instead?