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A Match Made In Caracas

- September 21, 2017

Bernie Sanders’ Government Takeover Of Health Care Funding Will Eventually Leave The Government Without Any Funds

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TOP TAKEAWAYS

  • Last week, Senator Bernie Sanders (I-VT) unveiled his latest single-payer health care plan, which has been estimated to cost $32 trillion over 10 years.
  • If implemented, single-payer could cost more than three-quarters of the federal government's revenue collected in 2016.
  • To help pay for this massive expansion of government responsibility, Sanders has proposed a slew of tax increases, including:
    • A 7.5% income-based premium on employers, including small businesses.
    • An increase in income taxes, resulting in some Americans facing a 52% income tax rate.
    • An increase in the death tax up to 55%.
    • A "potentially unconstitutional" wealth tax that Sanders has described as a way to spread the wealth around.
  • Despite all of these new tax increases, Sanders single-payer tax plan only raises $16.9 trillion over ten years for a health care plan estimated to cost $32 trillion over the same period.
  • This means that an increasingly cash-strapped federal government will be responsible for funding health care in America.

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SENATOR BERNIE SANDERS HAS PUT FORWARD A SINGLE-PAYER HEALTH CARE PLAN

Last Week Senator Bernie Sanders Unveiled His Single-Payer Plan

Last Week, Senator Bernie Sanders (I-VT), Along With 16 Democratic Co-Sponsors, Released A Plan To Create A Single-Payer Health Care System. "After weeks of buildup, Sen. Bernie Sanders has finally released his latest plan to create a single-payer health care system in the United States, tugging along 16 Democrats as co-sponsors of the Medicare-for-all legislation, many of whom appeared with him at a buoyant press conference Wednesday afternoon." (Jordan Weissmann, "Bernie Sanders' Big Single-Payer Proposal Skips Over The Hardest Thing About Single-Payer," Slate , 9/13/17)

  • Senator Sanders' 16 Co-Sponsors Were There For The Unveiling Of The Bill In Front Of "Nearly 300 Attendees And Heavy Coverage From Cable News," A Dramatic Change From When Sanders Introduced The Bill In 2013 With Zero Co-Sponsors. "Sanders released his 'Medicare for all' plan in a large Senate hearing room Wednesday, with nearly 300 attendees and heavy coverage from cable news. The bill has 16 co-sponsors, which is a big turnaround when he introduced a similar bill in 2013 without a single co-sponsor." (Rachel Roubein, "Senator Asks For CBO Score Of Sanders's Single-Payer Bill," The Hill , 9/14/17)

A Number Of "Potential 2020 Candidates" Co-Sponsored The Bill Including Senators Kamala Harris (D-CA), Corey Booker (D-NJ), Kirsten Gillibrand (D-NY), And Elizabeth Warren (D-MA). "Even more telling is the number of potential 2020 contenders who have decided to get on board with the plan. Sens. Kamala Harris, Kirsten Gillibrand, Cory Booker, and Elizabeth Warren each took turns at the podium Wednesday extolling the virtues of socialized health insurance." (Jordan Weissmann, "Bernie Sanders' Big Single-Payer Proposal Skips Over The Hardest Thing About Single-Payer," Slate , 9/13/17)

DESPITE THE ASTRONOMICAL COST, THERE IS NO MEANS TO FUND THE PROGRAM WITHIN THE BILL

Senator Sanders' Current Legislation Has Not Been Scored By The CBO, In Part Because There Is No Funding Mechanism In The Legislation

The Single-Payer Legislation Senator Sanders Presented Does Not Include Taxes To Fund The Bill. "The legislation itself does not include any taxes." (Jordan Weissmann, "Bernie Sanders' Big Single-Payer Proposal Skips Over The Hardest Thing About Single-Payer," Slate , 9/13/17)

According To Medicareforall.Org, The Reason There Are Only Vague Estimates For The Cost Of Single Payer Is Because Analysts Must Know The Funding Mechanism Before They Can Make A More Specific Estimate. "Why only a rough estimate is available for how much an individual or family would pay in taxes. There are multiple funding proposals. There have been and are many funding proposals with either national-based or state-based single-payer funding proposals. U.S. Congress committees and associated analysis will need to narrow down the proposals to one." ("How Much Tax An Individual And A Family Will Pay For National Single-Payer Health Care, Improved Medicare For All," Medicare For All, Accessed 9/19/17)

Separating The Potential Tax Hikes From The Legislation Itself "Gives The Co-Sponsors A Convenient Out From Endorsing Any Specific Tax Increase That Could Be Used Against Them In A Campaign Ad." "That might give wonks a sense of what the bill's backers are thinking. But it definitely gives the co-sponsors a convenient out from endorsing any specific tax increase that could be used against them in a campaign ad. More importantly, at least if you're a single-payer fan, it means they haven't committed themselves to some of the more controversial trade-offs that would be necessary to make single-payer a reality." (Jordan Weissmann, "Bernie Sanders' Big Single-Payer Proposal Skips Over The Hardest Thing About Single-Payer," Slate , 9/13/17)

Only Republican Senator John Barrasso (R-WY) Requested A Cost Analysis From The Congressional Budget Office. "Sen. John Barrasso (R-Wyo.) is asking congressional scorekeepers to analyze the cost of Sen. Bernie Sanders's (I-Vt.) "Medicare for all" bill, which could fuel Republican attacks that a single-payer health-care system would bankrupt the country." (Rachel Roubein, "Senator Asks For CBO Score Of Sanders's Single-Payer Bill," The Hill , 9/14/17)

Estimates From Left Leaning Organizations On Previous Proposals Show Single-Payer Costing Trillions Of Dollars

The "Left Leaning" Urban Institute Has Estimated That A Previous Senator Sanders' Single-Payer Plan Would Cost $32 Trillion Over 10 Years. "He cited a 2016 cost estimate from the left-leaning Urban Institute that a previous plan from Sanders would cost $32 trillion over 10 years." (Rachel Roubein, "Senator Asks For CBO Score Of Sanders's Single-Payer Bill," The Hill , 9/14/17)

  • The Urban Institute Estimated That The Plan Would Increase Federal Spending By 2.5 Trillion In 2017. "We estimate that the Sanders plan would increase current national health care spending on acute and long-term care by about $518.9 billion (16.9 percent) in 2017 and would increase federal government spending about $2.5 trillion (257.6 percent) in 2017 and $32.0 trillion (232.7 percent) from 2017 to 2026. Our 10-year federal cost estimates are higher than those published earlier this year by Kenneth Thorpe (2016). He estimated total new federal costs of $24.3 trillion over 2017 to 2026." (John Holahan, Lisa Clemans-Cope, Matthew Buettgens, Melissa Favreault, Linda J. Blumberg, and Siyabonga Ndwandwe, "The Sanders Single-Payer Health Care Plan," The Urban Institute , 5/16)

The Tax Policy Center Has Estimated That Senator Sanders' Health Care Plan Would Increase The Federal Budget Deficit By More Than $18 Trillion Over The Next Decade. "The Tax Policy Center finds the new government benefits would more than offset new taxes for 95 percent of households, but the combined tax and transfer plan would increase federal budget deficits by more than $18 trillion over the next decade." (Len Burman, Gordon Mermin, and Frank Sammartino, "An Analysis Of Senator Bernie Sanders's Tax And Transfer Proposals," Urban Institute And Brookings Institution Tax Policy Center , 5/9/16)

The Federal Government Took In About $3.3 Trillion In Revenue In 2016 . "According to the Congressional Budget Office, the federal government took in a bit under $3.3 trillion in revenue in 2016." (Louis Jacobson, "How Expensive Would A Single-Payer System Be?," Politifac t, 7/21/17)

TO PAY FOR HIS SINGLE-PAYER PROGRAM, SENATOR SANDERS HAS OFFERED A MENU OF TAX HIKES AS "OPTIONS TO FUND MEDICARE FOR ALL"

Senator Sanders Has Proposed A Variety Of Tax Increases To Pay For Single-Payer, But Even These May Not Be Enough

Senator Sanders Has Offered A Separate "Menu Of Tax Hikes That Add Up To About $16.9 Trillion Over A Decade" Which May Not Be Enough To Fund The Program. "Instead, its authors have written up a complementary white paper titled 'Options to Fund Medicare for All' with a menu of tax hikes that add up to about $16.9 trillion over a decade (which, for what it's worth, might not actually be enough to cover the cost of a single-payer system)." (Jordan Weissmann, "Bernie Sanders' Big Single-Payer Proposal Skips Over The Hardest Thing About Single-Payer," Slate , 9/13/17)

In An Accompanying White Paper Released With His Single-Payer Legislation, Senator Sanders Has Proposed $16.19 Trillion In Tax Increases. "7.5 percent income-based premium paid by employers Revenue raised: $3.9 trillion over ten years. 4 percent income-based premium paid by households Revenue raised: $3.5 trillion over ten years. Savings from Health Tax Expenditures Revenue raised: $4.2 trillion over ten years. Make the Personal Income Tax More Progressive Revenue raised: $1.8 trillion over ten years. Make the Estate Tax More Progressive Revenue raised: $249 billion over ten years. Establish a Wealth Tax on the Top 0.1 percent Revenue raised: $1.3 trillion over ten years. Close the Gingrich-Edwards Loophole and Create Parity for Wealthy Business Owners Revenue raised: $247 billion over ten years. Impose a one-time tax on currently held offshore profits Revenue raised: $767 billion over ten years. Impose a Fee on Large Financial Institutions Revenue raised: $117 billion over ten years. Repeal Corporate Accounting Gimmicks Revenue raised: $112 billion ten years." ("Options To Finance Medicare For All," Sen. Bernie Sanders , Accessed 9/20/17)

  • One Suggestion Contained In The White Paper Is A "7.5 Percent Income-Based Premium Paid By Employers" That Would Raise $3.9 Trillion Over A Decade. "7.5 percent income-based premium paid by employers. Revenue raised: $3.9 trillion over ten years." ("Options To Finance Medicare For All," Sen. Bernie Sanders , Accessed 9/20/17)
  • Another Suggestion In The White Paper Is A 4 Percent Tax Increase On Household Income That Would Raise $3.5 Trillion Over A Decade. "4 percent income-based premium paid by households. Revenue raised: $3.5 trillion over ten years." ("Options To Finance Medicare For All," Sen. Bernie Sanders , Accessed 9/20/17)

Also Contained In The White Paper, Is An Increase Taxes On Income And Capital Gains, Raising $1.1 Trillion In Revenue Over 10 Years. "Make the Personal Income Tax More Progressive. Revenue raised: $1.8 trillion over ten years." ("Options To Finance Medicare For All," Sen. Bernie Sanders , Accessed 9/20/17)

  • Part Of Senator Sanders' Plan Is To Raise The Top Tax Rate From 39 Percent To 52 Percent, With Additional Brackets At 50, 45, And 40 Percent. "Progressive income tax rates. Under this plan the marginal income tax rate would be: 40 percent on income between $250,000 and $500,000. 45 percent on income between $500,000 and $2 million. 50 percent on income between $2 million and $10 million. (In 2014, only 136,000 households, the top 0.1 percent of taxpayers, had income between $2 million and $10 million.) § 52 percent on income above $10 million. (In 2014, only 16,700 households, just 0.02 percent of taxpayers, had income exceeding $10 million)." ("Options To Finance Medicare For All," Sen. Bernie Sanders , Accessed 9/20/17)
  • Senator Sanders Would Tax Capital Gains At The Same Rate As Ordinary Income. "Taxing capital gains and dividends the same as income from work." ("Options To Finance Medicare For All," Sen. Bernie Sanders , Accessed 9/20/17)

The White Paper Also Proposes To To Increase The Estate Tax From A Flat Rate Of 40 Percent To As Much As 55 Percent For Certain Estates. "The existing flat 40 percent estate tax rate would be replaced with the following progressive Rates: 45 percent for the value of an estate between $3.5 million and $10 million. 50 percent for the value of an estate between $10 million and $50 million. 55 percent for the value of an estate in excess of $50 million. An additional 10 percent surtax would apply to estate value in excess of $500 million. ($1 billion for married couples)." ("Options To Finance Medicare For All," Sen. Bernie Sanders , Accessed 9/20/17)

  • This Would Raise $249 Billion In Revenue Over A Decade. "Make the Estate Tax More Progressive. Revenue raised: $249 billion over ten years." ("Options To Finance Medicare For All," Sen. Bernie Sanders , Accessed 9/20/17)

In Addition To Raising Their Income Taxes, Senator Sanders Also Seeks To Impose A "Wealth Tax." "This option would establish an annual 1 percent federal wealth tax on the net worth of the wealthiest 0.1 percent of U.S. households. The tax would apply to net worth exceeding $21 million for a household. That means a household with $21.5 million would pay 1 percent of $500,000, or $5,000." ("Options To Finance Medicare For All," Sen. Bernie Sanders , Accessed 9/20/17)

  • This Would Raise $1.3 Trillion In Revenue Over Ten Years. "Establish a Wealth Tax on the Top 0.1 percent. Revenue raised: $1.3 trillion over ten years." ("Options To Finance Medicare For All," Sen. Bernie Sanders , Accessed 9/20/17)
  • "Others Have Argued That Any Wealth Tax Would Be Dauntingly Complicated, And Potentially Unconstitutional. Sanders Has Described It As One Way To Spread The Concentration Of Wealth." (Ruby Cramer, "With Popular Single-Payer Plan, Bernie Sanders Enters New Territory: A Wealth Tax," Buzzfeed , 9/20/17)

Senator Sanders Would Force Owners Of S-Corporations To Pay Themselves A Salary Separate From Their Business Profits So That It Could Be Subjected To Payroll Taxes. "Close the Gingrich-Edwards Loophole and Create Parity for Wealthy Business Owners. Revenue raised: $247 billion over ten years. This option closes the Gingrich-Edwards loophole which allows individuals who own and run an S-Corporation to game the system and avoid paying payroll taxes by claiming some income as business profits." ("Options To Finance Medicare For All," Sen. Bernie Sanders , Accessed 9/20/17)

Even If Every One Of Senator Sanders' Proposed Tax Hikes Were Implemented And Raised The Projected Revenue, There Would, Based On Two Estimates, Still Be A Funding Gap

Even If Every Tax Hike Senator Sanders Proposed Was Implemented, They Would Only Generate $16.9 Trillion In Additional Revenue Over 10 Years. "The legislation itself does not include any taxes. Instead, its authors have written up a complementary white paper titled 'Options to Fund Medicare for All' with a menu of tax hikes that add up to about $16.9 trillion over a decade (which, for what it's worth, might not actually be enough to cover the cost of a single-payer system)." (Jordan Weissmann, "Bernie Sanders' Big Single-Payer Proposal Skips Over The Hardest Thing About Single-Payer," Slate , 9/13/17)


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