Earlier this month, Sen. Elizabeth Warren promised that she’d reveal how she’d pay the $36 trillion (and climbing) cost of Medicare for All some time “in the coming weeks.” If she claims that it can be financed entirely on the backs of corporations and the rich, she will be lying.
That’s made clear by a report from the Committee for a Responsible Federal Budget, which is decidedly non-partisan. After studying tax data, it concluded that “Tax increases on high earners, corporations, and the financial sector by themselves could not cover much more than one-third of the cost of Medicare for All.”
The report notes that “there is not enough annual income available among higher earners to finance the full cost of Medicare for All. … Even increasing the top two income tax rates (applying to individuals making over $204,000 per year and couples making over $408,000 per year) to 100% would not raise $30 trillion over a decade.”
The rest of the report shows just how massive the tax hikes would have to be to come close to raising the money needed.
Among the options the CRFB considers that would raise $30 trillion:
- Adding a 32% payroll tax on all wages, on top of the 15% already imposed to finance Social Security and Medicare.
- Imposing 25% surtax on all income above the standard deduction, which would result in the lowest tax bracket of 35%.
- Creating a 42% value-added tax.
- Imposing a mandatory premium of $7,200 for every individual in the nation.
- More than doubling individual and corporate taxes.
- Cutting the rest of the federal budget by 80%.
- More than doubling the national debt.
As the CRFB points out, these options would all have punishing impacts on the economy. Increasing the payroll tax will cost jobs and sharply reduce economic growth. Doubling income taxes will raise the top rate to close to 90%. A VAT would amount to a massive new tax on middle-class families. Piling on more debt to an already unsustainable trajectory would be catastrophic.
Keep in mind that these options assume Medicare for All only costs $30 trillion over 10 years, which is a completely unrealistic, low-ball estimate unless the intention is to completely destroy the health care system in addition to the economy.
Nor does the CRFB attempt to figure out how Warren would cover Medicare for All, while also promising nearly $10 trillion in other new federal spending programs.
Is it any wonder Warren isn’t being forthcoming with how she’ll pay for this?
Even Sen. Bernie Sanders, who at least admits that everyone’s taxes will have to go up, won’t provide any details. All he’s done is list “options” that, taken all together, wouldn’t cover half of Medicare for All’s tab.
When pressed for details by CNBC’s John Harwood how he’d cover the other half, Sanders would only say: “You’re asking me to come up with an exact detailed plan of how every American — how much you’re going to pay more in taxes, how much I’m going to pay. I don’t think I have to do that right now.”
Of course, Sanders and Warren have provided plenty of details on all the goodies Americans would supposedly get under Medicare for All. No premiums, no deductibles, no limits on doctor visits, first-dollar coverage for drugs, vision, dental and everything else under the sun.
Warren keeps telling the public not to worry, that middle-class families’ “costs” will go down. But without providing any realistic plan to pay for all that largesse, she can’t credibly make that claim.
Warren and Sanders aren’t on the fringes. They now represent the mainstream of the Democratic Party. It’s time for them to come clean about what socializing health care will mean for taxpayers.
— Written by John Merline
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