When Sen. Elizabeth Warren released details on how she’d pay for the $34 trillion Medicare for All plan, she said that it would “make plain the choice facing the American people.”
She’s right about that. The choice she’s offering would not only destroy two industries and cause an economic catastrophe, it would give the federal government unprecedented control over the decisions of private industry.
Warren was forced into releasing payment details because she kept refusing to say whether her Medicare for All plan would require tax hikes on the middle class. In order to continue that fiction, Warren produced a document that even the left says is wildly unrealistic.
The latest Medicare for All cost estimate – this one from the liberal Urban Institute – is that it would cost taxpayers $34 trillion in its first 10 years. As we reported in this space recently, it is impossible to cover that cost without raising taxes on the middle class.
So Warren simply waves her magic wand and makes $14 trillion in costs disappear. And how does she cut Medicare for All’s price tag by 41%?
- impossibly deep cuts in drug prices,
- devastating cuts in payments to hospitals and doctors,
- and entirely unrealistic claims about overhead costs.
Even with Warren’s phony price tag of $20.5 trillion, the taxes required are truly astronomical. Warren says businesses would have to contribute $8.8 trillion in taxes to help finance Medicare for All. She says they should be grateful because under the current system they’ll spend $9 trillion on employee health benefits.
But she doesn’t actually know that businesses will spend $9 trillion on health care over the next decade. It’s just a guess. And not a very good one, since businesses are finding new and better ways every day to keep their health costs under control.
The deal she’s actually offering to businesses is that they swap employee health benefit costs they can control with a massive new federal tax they can’t.
What’s more, this new tax would give the federal government an enormous lever to force companies to do its bidding. Warren herself shows what that would entail. Employers, she says, could cut their Medicare for All costs by “supporting unionization efforts and negotiating with workers to provide better wages and benefit.” Once this massive new tax is in place, businesses can be cajoled into doing almost anything.
Even the supposed business savings are phony since Warren would massively raise corporate income taxes. In her plan, she announces that she would:
- repeal the Trump corporate tax cuts, reinstating the 35% tax rate that made U.S companies uncompetitive among industrialized nations,
- enforce a “country by country” minimum tax of 35%,
- and lengthen depreciation rules.
Combined, these and other new levies would raise corporate taxes by $2.9 trillion.And this doesn’t count the following:
- the $800 billion tax on financial transactions she’d impose
- the $100 billion fee on “big banks”
- a 6% wealth tax
- much higher capital gains tax rates
- and a requirement that taxes be paid on cap gains every year, whether or not the stocks are sold
Guess who will be paying all those costs?
Meanwhile, drug companies would be entirely at the mercy of whatever price caps Warren decides to impose (namely, 70% cuts for brand name drugs and 30% cuts for generics), since they’d have no other buyers.
Pharmaceutical companies that don’t play ball, she says, would risk losing their patent protection (through compulsory licensing) while the government takes over drug manufacturing. Say goodbye to the pharmaceutical industry.
In sum, Warren is peddling a health plan that, if it were actually enacted, would devastate the economy, wreck the nation’s health care, and put the government in control of just about every business decision. And she has a good chance of claiming the Democratic party’s nomination. That’s frightening.
— Written by John Merline
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