Bernie Sanders’ Proposed Tax Hikes To Pay For “Medicare for All”
Stanley Feld M.D.,FACP, MACE
Nothing is free despite Bernie Sanders and other socialists’ promises. “Medicare for All”is proposed to replace private insurance with government insurance as the single party payer.
The government controls of several parts of our healthcare system. All these parts, Medicare, Medicaid and the VA Healthcare System, are financially unsustainable. All, except Medicare for seniors, are unsatisfying for patients.
Each year the Medicare premiums and deductibles for seniors have been increased, services have decreased and reimbursement to providers have decreased. It is past the point of being unaffordable for many patients although it has been invaluable for sick patients who could not possibly afford the cost of care without Medicare.
In reality the government owns these healthcare services, but it does not run these healthcare services. The administrative services are outsourced to the healthcare insurance industry. The healthcare insurance industry, in turn, has figured out how to game the system and take advantage of the government and citizens involved in the system.
Additionally, the inefficiency of government bureaucracy intensifies waste and cost. The estimated cost of Bernie Sanders’ “Medicare for All” is thirty -trillion dollars of ten years. Many believe thirty-two trillion dollars over ten years is a low number. It is also over 90% of the United States’ total ten- year budget at present spending.
Bernie Sanders has released a set of tax hike options in order to get some of the money to pay for his fiasco.
“These tax hikes would hit American families at every income level and businesses large and small. The proposal increases taxes by $16.2 trillion over the next decade, according to an estimate of Americans for Tax Reform.”
This proposal will cover only half of the thirty-two trillion-dollar estimate.
- A 4% increase in payroll tax to employees.
“According to Sen. Sanders’ estimates, this increases taxes on American families and individuals by $3.9 trillion over ten years.”
- A new 7% increase in payroll tax for employers.
This tax will hinder business growth. It will decrease employment because it will decrease business spending on employees. It will also increase government spending for entitlements. This tax increase will only provide an estimated 3.5 trillion dollars over 10 years. It will probably result in less than 3.5 trillion because there will be less payroll tax to collect.
Please note Bernie’s numbers between employee and employer payroll taxes do not add up. It is pure fiction.
- The proposal would ban employer-provided healthcare insurance and repeal the employer deductions for health care insurance. The net result will be increasing taxes on businesses by over $3 trillion over a decade.
This adds up to an additional 3 trillion-dollar cost to business not necessarily a three trillion-dollar savings.
- Bernie Sanders’ proposal would also repeal Health Savings Accounts, which are utilized by an estimated 25 million American families. Health Savings Accounts are a good deal for middle class families earning between $60,000 to $200,000 a year. Health Savings Accounts would even be more attractive if they were changed to Medical Savings Accounts.
At present roughly half of the Health Savings Accounts are owned by middle class families.
A key element in a successful reform of the healthcare system is to provide health and financial incentives to citizens. Citizens must become responsible for their health and healthcare dollar in order for healthcare reform to succeed.
Bernie’s plan helps people be less responsible for themselves and more dependent on the government.
Isn’t this exactly what the socialists want? Historically socialism always fails.
- The tax deduction for cafeteria plans and the medical expense deduction is also eliminated.
- Eliminating Health Tax “Expenditures”
n all, Sanders estimates this will increase taxes on families and businesses by $4.2 trillion.
- 70 percent Top Tax Bracket for Ordinary Income and Capital Gains Income
This would give America the highest income tax rate in the world.
“ According to the Tax Foundation, a top 70 percent rate for ordinary income and capital gains income above $10 million will raise $51.4 billion over a decade. After accounting for macroeconomic effects, the proposal would actually cost the government $63.5 billion because of the proposal suppresses investment and economic growth.” In reality the income and negative effect to the government are a small number and insignificant to paying for the cost of “Medicare for All.”
- 77 Percent Death Tax
“Sanders proposes raising the death tax rate to 77 percent for inheritances.
Currently, the death tax applies to estates over $11 million or 22 million per couple. Over 22 million dollars is taxed at a rate of 40%.
The death tax is, in reality, a double tax. People have paid tax on the money they have saved already. At the time of death, the government taxes them again on post-tax dollars. The tax should really be called a confiscation tax.
Bernie Sander’s death tax proposal will increase taxes by $2.2 trillion over ten years. This is an insignificant amount compared to what “Medicare for All” will cost.
- Wealth Tax
“Bernie Sanders proposes an annual wealth tax of 1 percent kicking in above $21 million in assets. Sanders estimates the proposal will increase taxes by $1.3 trillion over ten years.”
10. Bank Tax
“ Sanders proposes a tax on financial institutions totaling $800 billion over ten years.”
11.Broaden the Self Employment Tax
Sanders would require business owners to report more of their business income as salary, increasing the amount of self-employment tax owed. This would increase taxes by $247 billion over ten years.
The total increase in taxes would only result in a $16.5 trillion-dollar payment on a thirty-two trillion-dollar bill. Where will Bernie get the rest of the money? He probably figures the government could print the other $16 trillion dollars. If it does it will decrease the value of the tax increases and an overall cost will be higher than 32 trillion dollars.
There is something seriously wrong with socialistic thinking. I do not believe the majority of American will fall for this serious defect in thinking.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
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