Democrat hopefuls for president are promising many things like “free” preschool, “free” college, “free” childcare, universal basic income, Green New Deal, Medicare for all, etc., etc., etc. Proposals to fund most of this involves taxing the rich through substantially higher marginal rates and or a wealth tax. I was curious if anyone here has looked at what it would take to fund all this and what are realistic figures on actual revenue that would be generated by taxing the wealthy?
Uh, Republicans are absolutely exploding the deficit as we speak.
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No, it won’t. It would also have to be coupled with deficit spending that would increase our debt even more.
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The focus of this thread is not even to consider debt or deficit but to look at the spending that would be required and weather taxing the rich would actually produce enough revenue.
If we have Medicare for all, which we should, the lower and middle classes must help fund it. A national sales tax could be a solution. No one likes paying more taxes, but paychecks would increase because employers wouldn’t have to pay for health insurance anymore.
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OP, thank you for defending the wealth of people earning millions of dollars every year from evil US government taxes. I’m sure they appreciate your efforts.
Find any post of mine in which I oppose taxes on the wealthy. This thread pertains to the economics involved in the many proposals being put out there along with an analysis of the projected revenues generated by the proposed taxes.
PS - I have no ability to defend the wealth of anyone.
Personally I’m not opposed to some form of Medicare for all. Hard to predict how it would work tax wise but it’s not like the current system doesn’t have its share of problems either.
I wouldn’t get too into the weeds yet. These proposals are not really able to be analyzed with any degree of accuracy. This is very much a brainstorming phase.
Not everything, but let’s look at some of the big ones.
Medicare for All
The Mercatus study that Republicans like to cite shows that it will cost $32 trillion over 10 years. The thing is, our current system will cost $2 trillion more than that over the same time period. So switching to M4A wouldn’t require a “taxing the rich” so to speak, it’d require a shift in funding sources/types (e.g. instead of employers paying a portion of the premiums on private plans, they’d pay a tax that funds M4A and this would potentially be lower, seeing how the overall system would cost less).
Publicly Funded College/Higher Education/Trade School
It’s estimated that this would cost a total of $70 billion in taxes. Keep in mind, this isn’t $70 billion more than what people spend right now. It’d just be a shift from people paying tuition out of pocket to paying for it from the general fund. Again, a shift of funding sources/types. Now, keep in mind, due to the Trump Tax Cuts, we brought in $200 billion LESS revenue than we would have with the previous tax code. Had we stuck with the status quo, we could have funded public higher education and had $130B left a year. So, I guess you could call it taxing the rich now, but I’d call it not disproportionately giving them a deficit fueled windfall.
Universal Childcare
Moody’s analysis [1] of Warren’s Universal Childcare proposal estimates it would cost $1.7 Billion over a decade. So, $170 million a year. I don’t understand why this would even been a question, given we’d have $130B left a year after publicly funded college simply by going back to the previous tax code.
Universal Preschool
I’ve seen costs for this ranging from $2 billion a year to $12 billion a year. Either way, seems like a no brainer.
I’m not going to touch UBI or Green New Deal. I’m not sold on UBI (especially if we have all of these safety net programs) and the Green New Deal is a hodge podge of proposals, many of which are covered in my previous points.
But, as you can see, the argument needs to be reframed from “taxing the rich” to asking the public: Would you rather we give a disproportionate, deficit fueled windfall to corporations and the wealthy, or would you rather use that revenue to provide: Universal Healthcare, Higher Education, Childcare and Preschool? Because all of that could be funded with the status quo previous to the GOP tax cuts and we’d still have some money left over (to the tune of like $100 Billion a year + $200 Billion more in the economy due to lower healthcare spending).
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No it wont. Everyone will have to pay in, even as Bernie sanders has said. But the argumemt is that, at least for single payer, it will be less than what you pay in premiums for the low/middle class. Not to mention that everyone is guaranteed health insurance. Economies of scale.
This too. Getting health insurance out of employers hands will reap benefits to employers.
Basically, “invest in our basic needs/humanity” vs “invest in profits / greed / the rich”. Trickle down is BS. Trickle up is not.
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Not the point. Both Clinton and Obama increased the top marginal rate and after weathering all the conservative fear-mongering that the economy would tank presided over periods of economic expansion and reducing annual deficits. Both Bush Jr. and Trump reduced the top marginal rate and presided over an economic meltdown (Bush) and a to-be-determined (Trump) while seeing the deficit soar.
The next Democratic President will readjust the op marginal rate simply as a matter of fiscal discipline… something the Republican Party abandoned when David Stockman and the Laffer Curve became the leaders of Republican economic thinking.
Well on top of all those, you don’t have any estimates on what it’s going to cost in taxes or increased costs to joe q public for the war on coal/oil/natural gas.
although the new climate change regulations it suggests could run to $1 trillion.
Just one of the things listed in CNN’s breakdown of the new green deal. Not much of it is listed in your cost annalysys above.
Then you have outsider Dem Candidate Yang who is pitching $12,000 per year for EVERY adult American. With all the Dem Cities trying some form of basic income, you know it won’t be long until dem’s in congress start pitching the stupid expensive idea.
I’ll bite how?
If you read back, businesses will be taxed what they were paying in health care costs. So they will still have the expense. Some might be taxed even higher than what they were paying for their share. So how will employers reap the bennefits?
No, it wouldn’t be enough.
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I definitely wouldn’t list that in my cost analysis because like I said, the Green New Deal is a 14-page wish list without any specifics. Besides, CNN provides that $1 trillion estimation which doesn’t even apply to AOC’s GND, but a different GND that a conservative think tank gave an “analysis” [1] on. It’s a hard hitting analysis with well thought out conclusions like: “In sum, it is hard to envision a scenario where the total costs of these regulatory needs are less than $1 trillion, and the costs could be multiples of that amount depending on how they are structured.”
Like I said, I’m not exactly sold on a UBI. It’s very Thomas Paine-ish, but with sufficient social programs in place, I’m not sure it’s necessary.
But you guys go ahead and ignore the fact our of the biggest proposals could easily be paid for without “taxing the rich.”
The idea for UBI is to get rid of all social programs and replace them all with one payment.
You can have social programs or UBI, but you won’t have both.
Well, the question is - will they be taxed less and with them not needing to administrate and shop for plans / employee benefits, will it cut down on further overhead (since they simply pay a tax). It’d be no different than how payroll taxes are currently paid - ss, medicare, etc. If it is medicare for all, then we’d just see the medicare taxes go up and employers would pay for half like they do now.
