Medicare for All
Medicare for all is a hot topic these days. It might be one of the hottest topics in the election coming up next year. Almost all democratic candidates for president in the next election have embraced it, some have put out plans for it as well. Personally, I am for medicare for all, but on a fiscal level I think all of the candidates are wrong on how to implement it.
Why are they wrong?
The biggest argument that the republican party gives is that we cannot afford medicare for all. This is where I want to start. I do not think under any of the proposed plans that we can actually afford it. All of the plans end up ballooning our debt, this is something I am strictly against.
Here is my proposal
I think we need to add a new tax. People hate new taxes, that makes my idea immediately unpopular. While I am being unpopular, I want to raise taxes as well. Hear me out before you click away. Bernie’s plan comes the closest to what I would propose, but I would take it a step further.
The Sanders plan includes adding a new 11% tax to payroll to help fund the medicare for all. 7.5% to be paid by the employer and 4% to be paid by the employee. This is one key place I would raise taxes. I would introduce a sliding scale. My idea would raise the payroll tax to 15%, but add a couple new caveats. The first of which, is that the employer can choose to pay the whole 15%, but can pay no less than 7.5%. The second caveat is that I would introduce a CITY by CITY income scale, based on where the employer’s office is and where the employees work. In this scale, there will be a floor income range. In this income range, it will penalize the employer by assigning a different percentage of the health care tax they have to pay.
Here is an illustration, for the sake of round numbers I am going to work off the current federal minimum wage and the cost of living in Nashville. The minimum wage is where the floor needs to be set, since it is the minimum that an employee can be paid.
7.25 * 40 * 52 = 15,080 per year
Because I cannot find good reliable statistics, lets say the cost of living in Nashville is $2000 a month. An employee making the federal minimum wage is $4,820 below the floor in Nashville. So employees making minimum wage would realize no new tax on their checks, instead the employer would pay the full 15%. Once an employees pay hits the floor, for every percent they are above the floor, a half percent will be reduced from the employers contribution and shifted to the employee.
The idea behind this is two fold. The first is that there are huge differences in the quality of living in different parts of the country. When a 1 bedroom apartment costs $2000 in NYC and costs $600 for the same level of apartment in another city, we cannot use the same scale. The second line of thought is you do not consume the whole employee raise with new taxes, it is a gradual shift.
As a side note, when you age out of the workforce, the new tax for medicare for all vanishes, but also, the standard medicare and social security taxes vanish as well. This will free up more money for seniors, without the government having to take more money in and spend an overcost to disburse it.
I am just a regular guy, I do not have a CBO behind me to calculate the numbers, the economic impact, I am just building off of what I have seen other candidates use.
Shoring up the other gap
There is another gap with medicare. It does not bring in enough money to actually fund itself. For both the new tax I am proposing and the existing medicare social security tax, the limit would need to be lifted. Right now, individuals that make over $128k a year do not pay any social security on the earnings over $128k. I propose to lift these ceilings. Sure, some people will not like it, namely the people that make over $128k. Taxes are supposed to be proportional, this is not proportional.
I am prepared to argue all day long that the $3750 that a person makes $50,000 a year is worth more to them than the $37,500 that a person that makes $500,000 a year.
This is a good starting place, I would love to see the numbers it generates, but unfortunately I am not in a position to actually be able to generate them.