Self-avowed socialist and Democrat presidential candidate Bernie Sanders has released his proposal for a government takeover of the American healthcare system. The proposal, which Sanders calls “Medicare for All,” replaces private insurance with government as the single payer.
Rather than including financing mechanisms in the legislation, Sanders released a set of tax hike “options” that would be paired with the proposal.
These tax hikes would hit American families at every income level and businesses large and small. The proposal increases taxes by $14.3 trillion over the next decade, according to an estimate of Americans for Tax Reform.
The list of proposed tax hikes are below:
A New, 4 Percent Employee Payroll Tax
Sanders would impose another 4 percent payroll tax on employees which he calls an “income-based premium paid by employees.”
According to Sen. Sanders’ estimates, this increases taxes on American families and individuals by $3.9 trillion.
A New, 7 Percent Employer Payroll Tax
Sanders would impose another 7 percent payroll tax which on employees which he calls an “income-based premium paid by employers.”
This is a $3.5 trillion tax increase over ten years.
Eliminating Health Tax “Expenditures”
The proposal would ban employer-provided insurance and repeal the deduction for health care, increasing taxes on businesses by over $3 trillion over a decade.
This proposal would also repeal Health Savings Accounts, which are utilized by an estimated 25 million American families. These tax advantaged savings accounts largely benefit the middle class – roughly half of all HSAs are owned by families earning between $60,000 and $200,000.
The deduction for cafeteria plans and the medical expense deduction is also eliminated.
In 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.
77 Percent Death Tax
Sanders proposes raising the death tax rate to 77 percent for inheritances. Under the proposal, the death tax would kick in at $3.5 million with a rate of 45 percent.
Currently, the death tax applies to estates over $11 million and applies a 40 percent rate.
This proposal will increase taxes by $315 billion over ten years.
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.
Sanders proposes a tax on financial institutions totaling $800 billion over ten years.
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.