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Financing Medicare for All would require ‘impossibly high’ taxes on wealthy Americans and corporations

A preliminary study from a budget watchdog found that financing Medicare for All would require "impossibly high taxes" on wealthy Americans and corporations — and likely compel the middle class to carry some of the responsibility paying for universal healthcare coverage in the United States.

The Committee for a Responsible Federal Budget published research on Monday on how Medicare for All could be paid for and provided a list of nine possible options. It said that taxes on the wealthy alone would not be enough to cover it.

"There is not enough annual income available among higher earners to finance the full cost of Medicare for All," the group said.

Democratic presidential candidates Sens. Bernie Sanders and Elizabeth Warren are both staunch supporters of the proposal, which would roughly cost an estimated $30 trillion over the next decade and expand coverage to include vision and dental. It would require a drastic overhaul in how the government taxes, spends, and borrows money.

"Each of these choices would have consequences for the distribution of income, growth in the economy, and ability to raise new revenue," the group wrote.

The possible financing options include:

  • A new 32% payroll tax on wages
  • An additional 25% income tax
  • New 42% value-added tax on consumption
  • Mandatory public premium averaging $7,500 per capita — or $12,000 per person not already on public insurance
  • More than doubling all individual and corporate income tax rates
  • Plunging non-health federal spending by 80%
  • More than doubling the national debt with increasing gross domestic product by 108 percent
  • Combination of the approaches above

Marc Goldwein, the head of policy for the budget watchdog, told Politico that paying for the system would all but certainly require some form of tax increases.

"No matter how you cut the numbers, htere is absolutely no way to pay for Medicare for All without tax increases — or spending cuts — on the middle class," Goldwein told Politico. "That doesn't mean middle-class costs will go up… but taxes will go up for sure."

Sanders helped thrust Medicare for All into mainstream politics during his last Democratic primary run in 2016. He's since sponsored legislation in the Senate and put forward a list of options to cover its substantial cost, which include a 7.5% income-based premium on employers and a wealth tax.

But he's argued that while taxes would increase under Medicare for All, it would save middle-class families money by reducing premiums and out-of-pocket costs.

Warren, however, has struggled to explain how she would pay for Medicare for All, and hasn't rolled out a plan on her own yet. Her primary rivals have pummeled her in recent weeks over her evasiveness on the issue, but she says she will release a financing a plan laying out how she would pay for the healthcare overhaul.