Here’s one way Medicare for All could be financed. Let’s go to the year 2017. The U.S spent $ 3.5 trillion on healthcare in 2017. $ 1.5 trillion of that $ 3.5 trillion was financed by the federal government.
This means for that year, we would have needed to raise $ 2 trillion in new taxes to have financed Medicare for All at those current spending levels since the $ 1.5 trillion in existing spending would be incorporated into the single-payer system.
Here are some revenue streams below that would have raised $ 2.0491 trillion in 2017.
• $ 390 billion could be raised a year from a 7.5 percent income-based health care premium paid by employers. An employer’s first $ 2 million in payroll would be exempt from this premium protecting small businesses throughout the country.
• $ 350 billion could be raised a year from a 4 percent income-based premium paid by households making above $ 29,000. Meaning this 4% tax would only apply to every $ 1 a household makes over $ 29,000.
• $ 275 billion could be raised a year by implementing the following progressive wealth taxes:
— 2% wealth tax on Americans with $ 50 million-plus in assets. — 3% wealth tax on Americans with 1 billion-plus in assets.
• $ 240 billion could be raised a year by implementing a tax on Wall Street speculation (0.5% tax on stock market trades, 0.1% fee on bonds, and a 0.005% fee on derivate trades).
• $ 229.5 billion could be raised a year by returning to FY2014 discretionary military spending (2019: 750 billion. 2014: $ 520.5 billion. 750-520.5=229.5).
• $ 190 billion could be raised a year by reversing the Trump Tax Cuts.
• $ 180 billion could be raised a year by implementing the following progressive marginal income tax rates (These are for single-filers. It’d be double this for married couples):
— 40 percent on income between $ 250,000 and $ 500,000.
— 45 percent on income between $ 500,000 and $ 2 million.
— 50 percent on income between $ 2 million and $ 10 million. (In 2014, only 136,000 households, the top 0.1 percent of taxpayers, had income between $ 2 million and $ 10 million.)
— 52 percent on income above $ 10 million. (In 2014, only 16,700 households, just 0.02 percent of taxpayers, had income exceeding $ 10 million.)
• $ 134.6 billion could be raised a year by taxing capital gains and dividends at income tax rates.
• $ 60 billion could be raised a year by eliminating the pass-through deduction.
As long as the economy continues to grow, most of the revenue streams above will continue to increase, which means there’s a good chance the revenue streams will match or be near the $ 32 trillion cost in new federal spending over 10 years that most studies have determined is needed to fully pay for Medicare for All.
Also, know the above is all assuming there’s no reduction in per capita healthcare spending at all. If the federal government reduces reimbursement rates for: medical devices, prescription drugs, and general care, as well as having $ 100’s of billions in savings from administrative costs that offset increased healthcare demand spending, that will result in less healthcare spending per capita; meaning, we wouldn’t need a revenue stream or two that was outlined in the scenario above if per capita cost of healthcare is substantially lowered.
No one has the perfect answer since the numbers are always changing and healthcare is so complicated in general; however, Medicare for All can be done in a reasonable way. Every other industrialized country has pulled this off in some form or another. The U.S can, too.