‘Options’ would include 4 percent new payroll tax for employees and 7 percent for employers, eliminate private insurance…
(Lionel Parrott, Liberty Headlines) It shouldn’t be surprising that Bernie Sanders’ “Medicare for All” plan comes with a hefty price tag.
Just how hefty?
Americans for Tax Reform sought to answer that question, reviewing a set of tax hike “options” released by the Sanders campaign that would pay for the proposal.
According to a press release from ATR summarizing the options, the Sanders healthcare plan—eliminating private health insurance and having the government assume control of the healthcare sector—would increase taxes by $16.2 trillion over the next decade.
The first of these taxes—which of course are only “options”—would be a new, 4 percent employee payroll tax. Sanders calls it an “income-based premium paid by employees.”
According to the Vermont senator’s own estimates, this would increase taxes on Americans by almost $4 trillion.
Employers would also potentially not be spared, as Sanders could also implement a new “employer payroll tax” of 7 percent. Like the first proposal, it would be income-based but paid by employers for the privilege of having workers.
Perhaps Sanders’ most radical proposal would be the elimination of employer-provided insurance, which would wind up costing businesses another $3 trillion in taxes over the next decade.
Health Savings Accounts—used by 25 million Americans—would also be repealed. ATR notes that middle-class families are the primary beneficiaries of such accounts.
Another radical idea would be a 70 percent tax bracket for income and capital gains, giving the United States the highest income tax in the world.
While the Tax Foundation says the high rate would raise $51.4 billion over the next 10 years, it would end up costing the government $63.5 billion because it would suppress investment and innovation, leading to a drag on the economy.
To soak the rich even more, Sanders is also considering a wealth tax. Those who have more than $21 million in assets would be taxed at a rate of 1 percent.
Another proposal is a bank tax—financial institutions would have to pay up, adding up to $800 billion in increased taxes over the next decade.
Sanders even wants the government to increase taxation at death, proposing raising the death tax to 77 percent for inheritances. An inheritance of $3.5 million or more would be taxed at a rate of 45 percent.
Currently, the death tax only applies to estates over $11 million and already applies a 40 percent rate. Sanders expects this proposal to increase taxes by $2.2 trillion over the next 10 years.
Sanders also wants business owners to report more of their business income as salary, which would raise the self-employment tax—another increase of $247 billion.
With all these tax hikes in so many areas, it’s no wonder the total comes to $16.2 trillion. The bad news? This would pay for only about half of the cost of Medicare for All, which according to estimates will cost at least $32 trillion.
In the end, the flaw in Sanders’ plan might be that it doesn’t raise taxes enough to pay for his socialist agenda. Back to the drawing board?