In the first few months of the year, Democrats across the country began offering new tax proposals. These proposals, they say, will be used to pay for a litany of new liberal initiatives like Medicare for All, the Green New Deal, or universal childcare. This week, presidential candidate Sen. Kirsten Gillibrand (D-NY) came out as a cosponsor of a new bill that would levy a 0.1 percent tax on sales of stocks, bonds and derivatives. In an interview with Vox, Sen. Brian Schatz (D-HI), the bill’s primary sponsor, argued, “The government has a revenue problem,” and his bill would be “among the most popular ideas to generate significant revenue.”
If Democrats want to enact Medicare for All, which is estimated to cost $32 trillion over 10 years, or the Green New Deal, which could cost $93 trillion over 10 years, generating “significant revenue” will be an absolute necessity. The problem for Democrats, however, is that none of their tax plans will come close to generating enough money to pay for their policies. Take a look at the revenue estimations below:
Kirsten Gillibrand’s (D-NY) financial transaction tax is estimated to raise $777 billion over ten years, according to the Joint Committee on Taxation.
Elizabeth Warren’s (D-MA) proposed wealth tax could raise $2.75 trillion over ten years, according to her campaign.
Bernie Sanders’ (I-VT) federal estate tax would raise $315 billion over ten years, according to his campaign.
Alexandria Ocasio-Cortez’s (D-NY) proposed 70-percent marginal tax rate on income above $10 million could generate $700 billion over 10 years, a Politico analysis shows.
Ignoring the economic repercussions that would surely follow, even if every one of these tax plans were enacted, it would only raise $4.54 trillion over ten years – not even 15% of the total cost to implement Medicare for All. Democrats argue that implementing a single-payer health care system will cut down on overall costs to the tune of $2 trillion over ten years. Even so, that still leaves taxpayers on the hook for over $25 trillion.
Democrats like to talk about raising taxes on the rich because it polls well. Medicare for All has also gained in popularity – that is until people are told it would raise their taxes. To make up for the $25 trillion revenue deficit, Democrats advocating for Medicare for All have a choice: they can either drastically cut federal spending, or they will need to raise taxes for all Americans. Either way, they should consider ending the farce that somehow taxing the wealthy will pay for their pipedream policies.