Rick Newman, a Senior Columnist at Yahoo Finance, discussed ways to pay for Medicare for All based on a report from a bipartisan think tank, the Committee for a Responsible Federal Budget.
The single-payer health plan supported by Bernie Sanders, Elizabeth Warren, and most of the Democratic candidates is only one costly initiative out of many that they are proposing. Financing even this one program will be a significant project.
Bernie has suggested ways to finance it and admitted everyone’s taxes would go up. Warren is still working on how to pay it and will no give a legitimate answer at this point.
“The report, published by the Committee for a Responsible Federal Budget, examines a variety of potential ways to raise the estimated $30 trillion over 10 years necessary to fund ‘Medicare-for-all,’
“A variety of analyses estimate that Medicare for All would require at least $3 trillion in new spending. That’s about as much tax revenue as the government brings in now. So if paid for through new taxes, federal taxation would have to roughly double.
Many of the Democrat candidates say they will give free healthcare to anyone who comes into the United States illegally. That is a massive unknown since many people from all over the globe will come for free healthcare.
The Committee for a Responsible Federal Budget (CRFB) outlined ways it could be paid for:
A 42% national sales tax (known as a value-added tax) would generate about $3 trillion in revenue. But it would destroy the consumer spending that’s the backbone of the U.S. economy. A tax of that magnitude would be like 42% inflation, wrecking consumer budgets, and the many companies that depend on them, from Walmart and Amazon to your local car dealer.
Other options include a 32% payroll tax split between employers and workers or a 25% income surtax on everybody. Or, the government could cut 80% of spending on everything but health care, which would include highways, airports, and the Pentagon. Or here’s a good one: Just borrow the money and quadruple Washington’s annual deficits.
The best idea might be charging every enrollee in the new program $7,500 per year, so they’d be paying directly for the coverage they’re getting.
That will go over well, and it will grow exponentially.
Sanders has at least suggested some possible ways to pay for it, including premiums paid by enrollees, a wealth tax on millionaires, and income tax rates as high as 52%. Warren is still an unknown.
Then we have the free 0-college education, reparations, public option broadband, free housing, more generous food stamp programs, free income, raise childcare credits, raise the minimum wage, et al.
These would be taxes we could not avoid paying. There is another option, vote for Donald Trump. He’s ready with new tax cuts.