She Thinks We’re Not Taxed Enough

I got to thinking about Senator Elizabeth Warren’s plan for Medicare4All. She says it will cost $52 trillion over the first ten years. Of course, it’s a government program so we can guarantee it will cost more than that, but we’ll use her figures for now.

To start with, there are about 330 million people in the US. So $52 trillion in ten years would work out to spending about $16,000 per year per person for healthcare. And that, in turn, means we would be spending:

Over. $60,000. Per. Year. For. A. Family. Of. Four.

YIKES! This is supposed to be the brilliant solution to the US spending too much money on healthcare? Fix it all by spending sixty kilobucks per year on each family of four? Regardless of who gets taxed to pay for it, that’s ludicrously expensive healthcare.

How expensive is it? Well, her plan is claimed to put us in line with the Europeans … except for one little detail. She plans to spend far, far more per capita than any European country on healthcare. Luxembourg and Switzerland spend the most of all the European countries, about $26,000 per year for healthcare for a family of four. Senator Warren is proposing spending almost two and a half times that amount.

So that’s the first huge problem with her proposal—it costs almost two and a half times as much as the most costly health systems in Europe.

warren cartoon.png

So I’d throw her proposal in the trash can simply for being obscenely overpriced. But there’s another glaring issue, which is just who she expects to pay for her whizbang plan. She says her wealth tax on billionaires will do the trick. So I thought I’d look at just how much money her so-called “Ultra-Millionaire’s Tax” would actually raise.

Conveniently, she’s put a calculator up on the web so all the billionaires can calculate what tax they would have to pay. An analysis of the calculated results reveals that her mystery tax requiring a special calculator is actually a bog-standard six percent tax on the value of the billionaires’ holdings. It’s not a progressive tax. It’s essentially a straight six percent of their wealth per year regardless of their holdings.

And for the final step, we note that the total wealth of all of the two thousand plus billionaires in the US is $2.9 trillion dollars … and six percent of that net wealth is a tax of 0.17 trillion dollars per year.

Now, recall from above that the Senator’s program will cost us $5.2 trillion dollars per year.

So her “Ultra-Millionaires Tax” will raise … wait for it … a mere 3.3% of the money required each year to fund her fantasy of Medicare4All. That’s enough to pay for her plan for the first 12 days of each year. And after that twelve days, she’ll need more $.

Heck, even if we took every single dollar from every single US billionaire, if we stripped them of everything that they own and sold it for taxes, all of their $2.9 trillion net worth together would only pay for less than eight months of one single year’s cost of Healthcare4All.

Which brings us to the underlying problem. Total income for all Americans is on the order of $17.6 trillion dollars per year. Senator Warren is proposing that we spend a third of our total income on healthcare … and that’s in addition to the Federal, State, and local taxes we’re already paying.

Send the Government over half of our income as taxes?? Madness.

And as a final comparison, we can compare her ten trillion in new healthcare taxes to those Federal taxes we’re already paying. Last year the US Government took in about $3.6 trillion in taxes. Senator Warren proposes that we jack our tax burden about twofold, to $8.8 trillion per year.

And that would mean that as a country we’d be paying half of our total income in taxes.

Now, there’s a question that Senator Warren has refused to answer from the beginning of her campaign—will her plan require increasing taxes on the middle class? She’s dodged, she’s tapdanced around it, but she’s never answered that simple question.

Well, guess what? If taking every dime from every billionaire in the US would only keep her plan alive for eight months, then yes, folks, you can be absolutely sure middle-class taxes would have to go up.

TL;DR version?

She proposes to raise our overall tax rate to half of our total income, more than two times larger than the rate today.

Gotta say … the fact that neither she nor her advisors have actually run the numbers on this plan is extremely worrisome. And it gets worse. In California, we have State income, sales, property, and gasoline taxes which add up to about eight percent of total income.

So if we’re to be paying half of our total income in Federal Tax, plus paying another 8% in various State taxes, we’ll be left with less than half of what we’ve earned … and Senator Warren talks offhandedly about that as if it were a good thing and no big deal.

Sigh …

Best to all on a half-moon night,

w.

PS—Senator Warren claims that a 6% wealth tax is too small for wealthy people to worry about. In the comments to her online calculator, she describes her 6% tax as “This amount, which you likely won’t even feel …”

But in only 11 years, a 6% annual tax would cut the value of someone’s holdings in half. Half! It appears Senator Warren and her staff have never heard of the Rule of 70. Like I said … extremely worrisome.

PPS—The Rule of 70 is an old businessman’s trick. It states that if you have an investment making compound interest at some annual rate “X”, the number of years until it doubles in value is seventy divided by X. So if the interest rate is seven percent, it will double in ten years.

And of course, the same thing works in reverse. If you are reducing something by 6% per year through taxation, the number of years to get down to half the original value is seventy divided by 6, or about 11 years.

24 thoughts on “She Thinks We’re Not Taxed Enough

  1. Gosh, I have an idea. Rather than do something completely stupid, like cut expenses, let’s raise even more taxes. No, no, no, I am not talking about taxing people who actually do stuff, I am talking taxing about charitable trusts and college endowments.

    I mean like…why not tax Harvard’s $39 billion? (Ya’ think Liz would tax that people who paid her $400,000 to teach a single class?)

    Why not tax the Ford Foundation with it’s $13 billion in wealth?

    Golly, if we are going to go after money, why not dip into the biggest pot?

    Question: why not?

    Answer: because that is where the powers that be – stash their power.

    Liked by 1 person

  2. I just woke up and my brain may not be operating at 100% just yet but how did you arrive at the $10.2 trillion/year figure? Isn’t it $5.2 trillion ($52 trillion over 10 years) – still a ludicrous number though.

    The thing that gets me with all these idiot politician who propose outlandish schemes to pay for healthcare for all is they never examine why healthcare is so expensive in the first place… I think the costs would fall dramatically if we just did a few things. Sorry to post from another person’s blog on yours but this post does a tremendous job of laying out a plan to lower healthcare cost so people can pay out of pocket – no insurance plan (let’s call it what it is, a prepayment plan) necessary.

    https://market-ticker.org/cgi-ticker/akcs-www?post=231949

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    • Thanks, Lunatic. You are correct, it’s $5.2 trillion. I changed the text to reflect the correct numbers. It makes no difference to my point or my conclusions.

      I love writing for the web. Any errors I make won’t be up there long before someone corrects me.

      w.

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  3. Glad to see that your power is back. My blackout was 40 hours, comparable to Venezuela. We are getting there, Warren or no Warren.

    Dear Presidential Candidate, how many times did you have to wait 2 hours in a line to buy oranges (only available just before Christmas)? I survived socialism, and I don’t want to repeat the experience.

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  4. I so very much look forward to DJT publicly humiliating her, and Shrillary. Oh, yea, Fauxhontas want be in any Presidential debates, Shrillary will be the only one since DJT won’t bother to show up to listen to her asinine braying. Never mind. MAGA #4more

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    • It may be a regional thing but I learnt it as the ‘rule of 72’ many years ago. Makes no difference to the argument of course.

      I must admit that I’m a bit surprised that 2000 billionaires can only rustle up 2.9 trillion between them. The top ten can get close to 700 billion between them. Actually now looking at the wiki article and it claims that the top richest 400 Americans had a combined wealth of 2.9 trillion.

      https://en.wikipedia.org/wiki/List_of_Americans_by_net_worth

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      • It is not relevant how much millionaires and billionaires have or don’t have, the leftard’s plan is to seize the private property and wealth of all Americans, which attempts will begin the Civil War they have so long been yearning for. And they will lose it just as they lost the first one they started, only difference will be this time there will be no reconciliation afterwards.

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  5. Well after she destroys the economy where is the revenue going to come from for the next year’s costs? Are the Democrats crazy enough to nominate her? Trump should be campaigning for her in Iowa and New Hampshire.

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  6. It’s not about the cost at all. It’s about Government controlling everyone’s healthcare, and then they control you.

    “What? You need two weeks of antibiotics for that cut you got while gardening or you’ll die from an infection? Lessee here… oh… my… it says here that three weeks ago, you were critical of how we were running things, according to your 3rd grade daughter. Can’t have that now, can we? Sorry, but we can’t give you antibiotics at this time. NEXT!”

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    • Not about health care, has always been about control, same with guns. Can’t control people who are in control of their own lives. Just ask the people of Venezuela, they are not in control of anything and they morons voted for it.

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  7. Ah, but of course it would cost that much. Think of how many bureaucrats it would take (at insane salaries) to manage it? And 300 million? Remember she’s going to open the floodgates borders so we’ll have a large portion of Central and South America that will get Medicare when they arrive. Oh, and the cost of the paperwork the doctors and hospitals will have to file… We’d be lucky if just costs 52 Trillion

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  8. This is an easily solved problem.
    First, have The Fed loan us the healthcare money at next to nothing interest throughout her administration.
    Then, we can have a new president promise to change the health care plan to something which actually works.
    Then, the Fed can crank up interest rates and start collecting real interest on the money they loaned us and pay congress to block the new president’s plan and keep the healthcare plan alive and pay even more interest on the money printed and deposited with the Fed in the first place.
    See how easy that was?
    We keep falling for it over and over.

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  9. Willis: My line is that politics is loot and plunder. Follow me and I will reward you with loot.

    In a democracy you bribe the voters with promises of free stuff. The Dems offer free health care; the Repubs offer tax cuts.

    But the middle class already has health care and doesn’t see why it should pay for other peoples’ health care. So the politicians have to lie. About HilllaryCare, Obamacare, and now Medicare4All.

    Maybe it will work; maybe it won’t.

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    • Christopher Chantrill: “The Dems offer free health care; the Repubs offer tax cuts.”

      I agree with your overall assessment that “My line is that politics is loot and plunder.” You picked a bad example to illustrate your point, though.

      Cutting taxes allows me getting to keep more of my own money. All the tax I pay was my money in the first place. “Free” healthcare, on the other hand, requires that taxes be taken from me and then are given back to me in the form of healthcare, which of course incurs a bureaucratic rake via higher costs.

      And it is theft from my wallet if the money taken is used for healthcare for someone who didn’t pay for their “free” government healthcare in the form of taxes. For those receiving that government largesse, it is “free” healthcare. Worse, tthey don’t even bother to send me so much as a Thank You note or a Christmas card.

      Again, I like and agree with your assessment, and I’m sooo stealing the line that politics is loot and plunder. Strewth.

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      • H.R.
        I agree with bot or you “…that politics is loot and plunder”. Would that that be all. With the DC suburbs now accounting for seven of the ten richest counties in America it’s no longer just the politicians. Everyone is now getting in on the game.

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  10. No one ever brings up this point: where will the service come from?
    Many more doctors and hospitals will be necessary to service everybody?
    Supply/demand dictates that prices will skyrocket.
    The doctor’s union, AMA, controls Med schools and limit their enrollment.
    Service has to get worse, so people will die and malpractice suits will rise.
    If the healthcare costs 5 Trillion per year, who gets this money? All the ambulance chaser lawyers!

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  11. I live in the Netherlands.
    I pay 1300,- euros per year. With 385,- euros for my own risk.
    So at most I pay 1685,- /yr/person for health care.
    If that is the standard Warren wants for the US I wish her luck.

    Like

    • I will never allow a scumbag like Warren to dictate my healthcare. My grandfather and his brothers liberated the Low Countries, then handed you freedom, do with it as you wish. You are welcome.

      Like

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