No direct tax hike on the middle class. That’s what Sen. Elizabeth Warren, D-Mass., pledged as she announced her plan to provide “Medicare for All.”
The Democratic presidential candidate released her health care plan Friday. Her proposal to fund Medicare for All without imposing direct taxes on the middle class differentiated her from her rival presidential candidate Sen. Bernie Sanders, I-Vt., who has said tax hikes on the middle class will be necessary to help pay for Medicare for All.
Warren proposed Medicare for All would be funded by new taxes on the rich, corporations and employers, as well as cuts to defense spending.
Her plan would cover health care and long-term care for everyone living in the U.S. while eliminating private insurance. The estimated price tag would be an additional $20.5 trillion in new federal spending over ten years.
That is a lower estimate than the $34 trillion in new federal spending the Urban Institute recently reported would be needed to fund a single-payer program.
Warren said she would redirect $6 trillion that state and local governments currently spend on health care to help fund Medicare for All. She would raise about $8.8 trillion through an “employer Medicare contribution” that would essentially redirect to the federal government what employers are currently paying to insurance companies for their workers' health care.
She said $1.4 trillion would be raised “through existing taxes on the enormous amount of money that will now be returned to individuals’ pockets from moving to a Medicare for All system with virtually no individual spending on health care.”
Boosting IRS enforcement of tax laws and strengthening tax reporting and withholding requirements would raise another $2.3 trillion to fund the plan, Warren said.
She also is floating new taxes aimed at the financial sector: a tax on financial trades, which she says could raise about $800 billion over 10 years, and a fee on large banks that she says could raise about $100 billion over 10 years.
Warren wants to make changes for corporations that would raise about $2.9 trillion over a decade. These include requiring businesses to write off the costs of their investments over a longer period of time, a country-by-country minimum tax of 35% on U.S. corporations’ foreign earnings, and taxing foreign firms based on their sales in the U.S.
The senator also said she would require the top 1% of households to pay taxes on their investment gains annually, instead of when the investments are sold, at ordinary income rates. She estimates this would raise $3 trillion over 10 years.