Robert J. Shapiro has a new piece out today at Washington Monthly that shows, sad to say, that Bernie Sanders and Elizabeth Warren simply can’t pay for Medicare for All. Even 50% hikes in both income and payroll taxes on everyone, plus a 100% hike in corporate taxes, can’t cover the cost—much less the fantasy that rich people and corporations will pay for it. Based on the numbers, one has to ask, is Medicare For All at bottom just a hoax? (BTW, we could achieve universal coverage for less than 5% of the cost of MFA by letting everyone without public or private group coverage enroll in the federal workers health plan.)
Photo: Michael Vadon/WikiMedia Commons
Here’s an excerpt: According to the Urban Institute, the Sanders plan would cost $40 trillion over 10 years (2022-2031). A more conservative estimate by the Mercatus Center at George Mason University sets the 10-year cost at $32 trillion. The challenge, then, is how to cover costs averaging $3.2 trillion to $4.0 trillion per-year. But here’s the hitch: It doesn’t matter whether we define the wealthy as the top 0.1 percent, the top 1 percent, or even the top 5 percent of Americans. Hiking their income taxes by 50 percent would cover, at most, a small fraction of MFA’s costs.
Those calculations start with the most recent Internal Revenue Service data (2016), adjusted for increases in income since then. On this basis, the top 0.1 percent of taxpayers will pay $310 billion in income taxes in 2020. Increasing their income tax burden 50 percent would raise an additional $155 billion, which is less than four or five percent of MFA’s average annual cost. (For an account of how these and other estimates were derived, see this underlying study.)
If you expand the definition of the wealthy to include the top 1 percent, a 50 percent hike in their income taxes would raise $312 billion in 2020. Ease up more to cover the top 5 percent of taxpayers—everyone earning $250,000 or more a year—and the 50 percent tax increase would raise $489 billion in 2020. Those revenues cover 12 or 15 percent of MFA’s annual cost.
Read the full story here.