Chapter 1: Making Universal Healthcare a reality
Medicare-for-All would guarantee healthcare as a right for all people. It’s worth presenting a vision and building momentum to turn this dream into a reality. This means mobilizing the House around a bill that can win in the public eye. I have some thoughts.
Assuming Medicare-for-All as described by Senator Sanders costs at the most $33 trillion over ten years (much less than the $48 trillion we are projected to spend, how could one best raise those funds so as to make the revenue stream politically salient? What taxes can, and should, we raise (or establish) in order to offset tax hikes to the middle class? I ask these questions with full knowledge that even with modest tax increases (or income-based premiums), most families would experience a net savings under Medicare-for-All. However, I believe that finding alternative revenue streams to lower individual contributions is a smart political strategy and sound policy.
Matt Bruenig, of the People’s Policy Project, proposed a program which he refers to as the American Solidarity Fund which acts as an activist investor for all citizens delving out bundled payments as a universal basic income. In his proposal, he illustrates a series of new taxes he would propose. What I am suggesting is that his tax base would be better utilized as the revenue source of a single-payer system. I am intrigued and, dare I say, partial to the ideas he lays out.
“To jump start the fund, the government could impose a one-time tax on the market capitalization of public (and possibly non-public) companies. A one-off 3 percent market capitalization tax would thus bring in around $1 trillion of assets.” The most expensive reports on the cost of single-payer peg it at $2.8 trillion/ year, so this tax would get us a good chunk of the way there. Bruenig then goes on to propose “the government could impose ongoing market capitalization taxes. This would be done at a lower rate, e.g. 0.5 percent per year. As with the one-time tax, the sec could administer this ongoing tax since it already imposes such a tax on newly-issued securities.” Bruenig also propose taxing IPOs. “When a company goes public through an initial public offering (ipo), its stock becomes much easier to trade. This “liquidity” is highly valued by investors and so they are willing to pay more money for publicly-traded stock than they are for private equity. This “liquidity premium” is estimated to increase the value of publicly-traded stock by around 20 to 30 percent. Since it is the government that creates the uniform and tightly-regulated securities markets that make this liquidity premium possible, it stands to reason that it should share in the value it creates. The 0.01245 percent market capitalization “filing fee” currently charged by the sec is too low. It should be raised to, for example, 5 percent.”
Senators Sanders popularized the ideas of taxing financial transactions in the 2016 primary by referring to them as “taxing Wall Street speculation.” There are a number of ways in which we could do this.
Financial transactions tax
“The government could levy modest taxes on the volume of financial transactions. Dean Baker estimated in 2016 that a 0.2 percent tax on stock trades, a 0.1 percent tax on bond trades, and a 0.002 percent tax on derivative trades would bring in around $120 billion, or 0.6 percent of gdp. It is worth noting that the SEC already has a very modest financial transactions tax. It is set at 0.00231 percent of the value of securities transactions. Finra also charges a Trading Activity Fee (taf) for certain securities transactions, which is similar to a financial transactions tax.”
Securities custodian tax
“Most securities are held by a custodian company such as the Depository Trust Company (dtc). When securities are traded, they do not change hands, but rather book-entry changes are made by the custodian indicating the new owner. The dtc boasts that it is the custodian of “more than 1.3 million active securities issues valued at us$54.2 trillion as of 7/31/2017.” An annual tax on securities custodians of 0.1 percent could pull in $54 billion from the dtc alone. Presumably the dtc would pass that along to the companies issuing the securities.”
Fund management tax
“Many investors own shares of funds that themselves own large baskets of various securities. These funds make money by charging fees equal to a percentage of the assets in the funds. Typical management fees are between 0.51 percent of assets and 0.74 percent of assets depending on the fund type. Some go as low as 0.03 percent.70 The federal government could impose its own assets under management (aum) tax for these kinds of funds, e.g. 0.05 percent. Fund managers would pass this through as slightly higher management fees for their overwhelmingly affluent investors.”
I favor employing this tax base or one similar to jumpstart and fully fund Medicare-for-All. I would use this to offset some of the contributions from businesses and individuals outlined in Bernie Sanders proposal as well as his capital gains taxes. I would rather keep those capital gains taxes on the table as an option for Elizabeth Warren’s new housing bill (The American Housing and Economic Mobility Act). Between the Bruenig taxes, capital gains, and inheritance taxes, the brunt of the burden would solely raise levys on the super rich. Lastly, I would add a stream of revenue that some might deem controversial or even absurd, the Department of Defense. In Fiscal Year 2017, the Congressional Budget Office reporting spending of $590 billion in defense spending, more than four times the size of China’s budget and nearly six times the size of Russia’s budget. America’s military industrial complex has propelled this country to spend money on weapons it doesn’t need, maintain over 800 military bases around the world, and engage in foreign wars that have devastated nations and led to the lost of hundreds of thousands of lives. With a goal of reigning in our defense spending 50% over a ten year period, we can reinvest the wasted dollars spent on projects like the F-32 fighter jet we bought for $1.45 trillion dollars that doesn’t work on important social measures like providing healthcare to all Americans and paying down the federal deficit.
By asking the wealthies among us to make a greater contribution, we can make single-payer a reality with a fairly low individual contribution. This is how we can create a positive vision for universal health care.