WA Legislators Proposing a New ‘Compensation’ Healthcare Tax
Jason Mercier of the Washington Policy Center is reporting on the heels of the State Supreme Court 'excise' capital gains tax ruling, here comes a compensation tax proposal.
Senate Bill 5767 would add a noticeable tax to the 'compensation' of certain healthcare workers.
Mercier reported on Tuesday, April 4:
"Democratic budget writers in the Senate introduced: SB 5767 (Funding health care access by imposing an excise tax on the annual compensation paid to certain highly compensated hospital employees)."
The bill considers the people who would be targeted by this bill as the "five" highest compensated healthcare workers who do not have direct patient responsibilities, presumably managers, or lead administrators (per the language of the bill).
It is being filed under the premise of 'expanding' healthcare coverage.
Text from the bill provided by Mercier:
"Beginning January 1, 2024, for taxes due in 2025, an excess compensation tax is imposed on the hospitals that pay covered employees excess compensation. The tax equals the sum of the annual total compensation, as required to be reported to the department of health under RCW 43.70.052(3) during the tax year, of any covered employee that is paid excess compensation during the tax year, multiplied by 7.5 percent.”
What is an excess compensated employee?
According to the WA Administrative Code ( 415-02-140) this is what it means:
"Excess compensation refers to certain payments from an. employer to an employee when the payment is used in the calculation of. the employee's retirement allowance."
Mercier reports this appears to be the latest, but not the first, in a series of bills designed to expand the capital gains tax to include a lot more people and do away with the $250K threshold or exemption.
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