Democratic candidates are declaring their run for President in 2020 at a fast and furious pace. In the process, they are trying to outdo each other with proposals for a variety of tax hikes on the rich.
For example, Elizabeth Warren wants a 2 percent wealth tax for Americans with a net worth over $50 million, and 3 percent for those with a net worth of over $1 billion. Bernie Sanders wants to increase estate taxes dramatically with a top rate of 77 percent over $1 billion. Kamala Harris wants to roll back corporate tax cuts and boost taxes on the top 1% of earners.
Even newly elected Democratic Congresswoman Alexandria Ocasio-Cortez, who can’t run for President for several years because of age restrictions, wants to tax incomes over $10 million at 70 percent.
The purpose of all these tax hikes is to pay for universal health care and bridge the ever-widening income gap by redistributing wealth from the rich to the poor.
Topics nobody has discussed, and would be refreshing to hear, include: how spiraling deficits will be paid back; fixing inefficiencies in the federal government; stopping Medicare and Medicaid fraud, and mitigating tax evasion.
While there is a path to raising taxes on the ultra-wealthy to partially fund universal health care, stopping the hemorrhaging of tax dollars in the operations of government is rarely discussed as a revenue source.
The federal budget for the fiscal year 2019 is a bit over $4.4 trillion, while projected revenue is about a trillion less.
This will add once again to the ever-expanding National Debt, now about $22 trillion and growing. The U.S. Government simply can’t continue to run these deficits without planning to pay them back.
Why are none of the candidates, including our President, talking about this, especially if they want to fund free health care for all?
In 2016, yearly cost estimates for universal health care ranged from $1.4 trillion, according to Bernie Sanders, up to $2.8 trillion after a study was conducted by The Committee for a Responsible Federal Budget. Just recently, a July 2018 article in Bloomberg magazine pegged the cost at over $3 trillion per year.
Taxing the rich will lessen wealth inequality but it won’t be nearly enough to pay for universal health care.
I believe everyone has a right to quality health care. Yet, without weighing in on the merits of raising taxes on the rich, here are some other suggestions to fund it:
• Cut Waste – Republican U.S. Senator James Lankford has issued a federal report on waste called “Federal Fumbles.” If you want to laugh at the way the report is presented, and cry at the multitude of ways Federal tax dollars are squandered, it’s worth the read. This exhaustive report highlights a total of $247 billion in wasteful spending. Getting rid of much of this pork is a good place to start.
• Go After Tax Cheats – How many people do you know who brag about being in a cash business? What they are really letting you know, is they are avoiding paying taxes to increase their income. They are also telling you everyone else who observes the law and pays what they owe is a sucker.
As explained on April 29, 2016, in an article on Fortune.com, tax evasion costs the federal government over $450 billion per year. The next time someone brags to you about being in a cash business, tell them they are stealing from your ability to get free health care. The Federal Government should add to and not cut the IRS budget, which is what President Trump did, to help mitigate tax cheats.
• Cut Military Spending – In 2018, America spent $610 billion on the military, $32 billion more than the next seven largest nations combined. Putting it another way, it’s almost four times what China spent, which has the next biggest military in the world.
I am not sure what the optimal amount of military spending should be, but when Democrats look to European nations who have universal health care and believe America should too, they don’t highlight the extraordinary sum spent on the U.S. military by comparison. America can’t fund European style health care while paying the high tab we now do for the military.
• Restore Half of the Tax Cut on Corporations – When President Trump cut corporate taxes from 35 percent to 21 percent, he cost the Federal government an estimated $1.3 trillion in revenue over 10 years, according to the Center on Budget and Policy Priorities.
Raising the corporate tax halfway back, to 28 percent,, in theory, theory generate $650 billion in funding over a decade, that could go towards universal health care.
Most Americans believe quality health care is a basic human right that should be enjoyed by all. Ways to pay for it without bankrupting the country need to be closely examined. Running an efficient government free of fraud and tax cheats, while tightening the belt on the military and raising corporate taxes are proactive measures that reflect good government. The singular action of raising taxes on the wealthy just won’t cut it.
