It’s that time of year again when we all must render unto Caesar, so this seems like a good time to compare the candidates’ tax plans.
Not too long ago Vox and the Tax Policy Center teamed up to provide this handy tool where you can calculate how much tax you’d pay under each candidate’s plan.
Keeping in mind that these are estimates, I used the calculator and found that the Beale household would pay $270 more a year under a President Hillary Clinton and … wait for it … a whopping $16,000 a year more under a President Bernie Sanders.
(In the interest of fairness, let me point out that we’d evidently pay $14,340 less under a President Cruz, but in no way would I ever vote for Ted Cruz. The entire nation would pay in so many other ways, for a generation or more. It hardly seems worth it to give up the Supreme Court for that.)
The upshot is, we simply could not afford Bernie Sanders’ tax plan. When I mentioned this a while back, a Bernie supporter told me that we’d actually come out even or maybe even a little ahead because universal healthcare would magically happen somehow, and we’d save money in the long run because we wouldn’t have to pay monthly health insurance premiums.
Ignoring all of the very real questions about how universal healthcare could happen with a gerrymandered Republican House and recalcitrant Republicans in the Senate, I have another question nobody has asked. Let’s pretend for a second that Bernie gets his “revolution” and universal healthcare happens. Could someone explain to me how people such as myself realize this insurance premium savings in the real world? Our family, like most American households, gets its health insurance through an employer. We don’t pay out of pocket for it: it’s an earned benefit.
So for people like us, who represent more than half of insured Americans, how do we realize this supposed health insurance premium savings? Is the Sanders camp assuming that employers will just raise everyone’s salaries, dollar-for-dollar, the same amount they’re paying on employee healthcare? Does anyone seriously think this would happen? Are they expecting this to happen voluntarily, or is there some legislative hammer they would enforce implement, forcing private employers to pay their employees the cash amount of this earned benefit? And does anyone think this would pass a Supreme Court challenge?
It just seems to me that the more you unpack Bernie’s pretty little packages, the more you find they’re filled with sawdust.
I don’t mind paying $270 more a year in tax so that low-income families have Head Start classes and all the rest. But paying $16,000 a year on some unrealistic promise of universal healthcare which doesn’t seem possible, let alone reasonable, strikes me as a stretch.
What am I missing here?
Southern Beale 
Would direct taxation not work? Could the employers not pay the amount that the would pay to health insurance companies to the government instead? Or would that not work? https://en.m.wikipedia.org/wiki/National_Health_Service_(England)
Well, his tax plan calls for a 6.2% tax premium paid by employers, and a 2.2% tax increase paid by households, which is how he says his universal healthcare plan will be paid for (in part, there will be tax increases on capital gains and other things as well). But getting back to my original question, under Sanders’ tax plan, this means employers are already paying. They aren’t paying their employee’s share, they’re paying their own “national healthcare tax,” so to speak. Sanders claims, “Businesses would save over $9,400 a year in health care costs for the average employee.” But that savings isn’t being passed on to employees. So employees are actually losing a benefit and paying higher taxes, but somehow this is all supposed to come out in the wash? It just doesn’t add up.
To be clear, I’m not a Sanders supporter and I don’t think his numbers add up. But there is a reason to believe that if he could cover health care costs in a way that had businesses paying less, then workers would get some share of those cost savings. When an employer offers a job to a worker, they have to figure their total costs, not just what they pay the worker. If the part of those costs that go for health care get reduced, then competition for workers should cause at least some of those cost savings to get passed on. Of course, how much gets passed on depends on the nature of the labor market we’re talking about. For professionals with rare skills, probably a lot. For the average person, probably not so much.
Wage stagnation has been a real issue for the past 30-40 years, and I buy that employers have used benefits packages to compensate for lower salaries. So I can see how if healthcare is taken out of the mix they’d eventually have to increase salaries. But I see that as more of a long range effect, something that if it does happen, may do so over time. I don’t see it helping anyone currently employed. We’re not going to suddenly get raises.
But even if employers do pass some of their hc savings on to their employees, since they’re paying a 6.2% tax already it’s certainly not going to be comparable to the benefit we’ve receive. And it’s a far cry from making up for the $16,000 in higher taxes.
I have a somewhat different question. The Sanders plan assumes that people who are currently getting insurance from their employers will do better because single payer will replace the employer coverage at a cheaper price, leaving more money to pay the employee. I’m not sure I buy the second part, but it at least seems possible.
But what about workers whose employers currently don’t pay for health coverage? They’re going to be hit by a double whammy of paying more taxes themselves and having their employers’ costs increase from the health care tax so there will be less money for wages. Those employers’ costs are going to go up a lot. I realize it won’t be a complete disaster because competitors will be in the same boat, but it does seem like it’s going to be a shock to the low wage/low benefit sector.
I thought the argument is that those people are paying out of pocket for their insurance now, and they wouldn’t have to pay that anymore.
But again, as you point out, employers would have to pay a 6.2% healthcare tax. And for those employers who don’t provide insurance for their employees now, that’s going to be a big hit for them. It’s likely they would lower wages or cut back in other ways (or to use the popular term from the recession, “increase efficiency.”)
Thanks, much, SB. I am really glad you did the research on just one of the Bernie promises. As you may remember, my comments on the ACA and how the Governor and our cowards in Nashville have not changed their opinion since 2010 when it went into effect. The ONLY reason Haslam even produced Insure Tennessee was because he and Gordon (TennCare Director) were sued by the TN Justice Center. Meanwhile those two cut hundreds from TennCare rolls, trying to prove Tennessee DID not need the $3 billion in free Fed tax dollars. I am proud to have been connected with all the SUPER activists why tried EVERYTHING but no LUCK. I wrote a letter to the Knoxville Sentinel answering Haslam’s ‘defense of Harwell as she became the most recent target. He as much as admitted he was no longer even discuss it. But I agree that we did finally get one answer from the Bernie camp. Also, Haslam’s Insurance committee to raise their premiums or drop their participation, plus they can now decide how much they will pay for various medical procedures under the ACA. Stay tuned; it will get worse, no matter who we put in the White House.
There is a better way to fund a universal health care system available to all, including visitors, where healthcare is part of the social contract and is free at the point of need, and I direct your attention to the state operated National Health System in the United Kingdom which was introduced in 1946. The system is funded principally from general taxation, which in the case of the individual amounts to 4.5% of his income, or it can be expressed as 18% of the average taxpayer’s annual tax bill. Interestingly, the UK system has been rated as one of the most efficient and effective in the world, yet consumes only 8.6% of GDP, in contrast in the US, nearly 16.8 % of GDP is absorbed in healthcare delivery. In response to the serious healthcare problems of a nation where, unless you were wealthy, in 1911 the UK government under Prime Minister David Lloyd George tried a variant of the system in use in the US, whereby a small premium was deducted from the employee’s wage, and in return he received free healthcare, based largely on the model that Bismarck had introduced in Germany in the previous century, but it only afforded healthcare to employed individuals. After World War 2 there was a perceived need for better healthcare delivery, the resulting Beveridge model which was implemented by the socialist reformer Baron William Beverage in 1946 effectively made most if not all doctors employees of the state, and set up a national governing board to oversee policy. Since the end of World War 2, longevity has increased from 62 to 79.6 years, ahead of the US at 77 years. Two things stand out in the way of costs, doctors in the UK do not become multi-millionaires as frequently is the case in the US, and the UK citizenry has a marginally higher tax bill associated with healthcare, but all pay in to funding it, as the primary revenue source is general tax funds, including corporations.
I’m sure there are a lot of better ways to do it. I guess Sanders’ plan is the way it is because he’s adapting to our existing model.
My point is that Sanders’ supporters blithe claim that the higher taxes are made up for by savings on health insurance premiums doesn’t really work for more than half of the U.S. insured in a really obvious way.
That Vox/TPC calculator is seeing a lot of criticism for being misleading:
http://www.commondreams.org/views/2016/03/30/ezra-klein-and-terrible-horrible-no-good-tax-calculator
For one thing, the tax burden under Sanders includes payroll taxes borne by employers, on the theory that employees will actually pay those in some sort of pass-through/trickle-down fashion.
Yes I see that Common Dreams calls it “a gimmick that is entirely useless except as a deceptive advertisement for Hillary Clinton.” Why is everything always always ALWAYS “a deceptive advertisement for Hillary Clinton”? Especially since I’d also pay more under Hillary’s plan, just not as much as under Bernie’s? In fact, as my post pointed out, this calculator — deceptive or not — shows I’d actually save over $14,000 a year under Ted Cruz. If anything, it’s “a deceptive advertisement for Ted Cruz.”
Deceptive or not, accurate or not, that doesn’t answer the question I raise in my post:
How are people who don’t pay out of pocket for health insurance premiums but instead receive it as an earned benefit from their employer supposed to realize the “savings” of Bernie’s universal healthcare plan?
No one on Bernie’s side of the fence has answered that question. It’s a very logical question since more than half of insured people in America get their insurance that way.
I don’t want to hear another Bernie surrogate tell me that higher taxes, whether it’s via payroll or personal income tax or a VAT or whatever, is made up for by not having to pay for health insurance until they can answer that question. I don’t think that’s asking too fucking much.
How would these employees see the savings in any form of single payer health care system? It is interesting to see Clinton supporters – not just you SB but on other boards as well – bash Bernie for proposing a single payer system when I thought most Democrats were in favor of instituting this type of healthcare system.
The savings is three-fold. For those who pay out of pocket for their health insurance, they obviously wouldn’t have to pay that anymore. Employers wouldn’t have to pay any more for their employee health plans. We all save because under single-payer you’re covering more people, so the costs for services go down, and by allowing the government to negotiate directly with pharmaceutical companies, which the Republicans outlawed when Bush was in office, prescription drugs would also be cheaper. Over time, costs decrease because the people who are uninsured now can receive preventive care, which is cheaper than waiting for treatable diseases to become expensive emergency care. It’s true that Americans pay more than the citizens of any other country for healthcare, but we get less.
The reason people like me are no longer on the universal care bandwagon is because we lost that battle during the ACA fight and I see no reason to waste time, money, energy and political capital on something that’s basically finished. As you may remember, one of the big knocks on Obamacare was that it would further entrench our existing system in place. We all knew that was 100% true — I never argued that point. But Obama was the one who said don’t make the perfect be the enemy of the good. That’s what that statement was about: we all agree the best system is single-payer, no one disputes that. But the reality is, it’s not going to happen. ACA came in at a critical, once-in-a-lifetime time in American politics. We had a very small window to get something big done, and by “big” I mean covering 20 million uninsured, not “big” as in “death panels,” “government-coming-between-you-and-your-doctor” and the other wingnut bullshit.
And it’s so hilarious to me that the wingnuts really lost their shit over what was basically health insurance reform, not healthcare reform. Honestly, they should have been kisssing Democrats’ feet over Obamacare, because what Hillary tried to do back in the ’90s, and what Democrats have been trying to do, is get single-payer. So this was a huge concession to Republicans. It was, after all, a Republican plan. And instead of high-fiving themselves that they won the battle over healthcare, they were spreading lies and acting all butthurt over “socialized medicine” and filing court briefs and the like. Absolutely hilarious.
So now we have Bernie coming along and he’s bringing the universal healthcare thing back up again. Which, you know, is kinda funny. Most of us realize the battle is over on that issue, at least for this generation. But the ideologues on the Left are still fighting. So you guys better watch out. You may regret not accepting Obamacare because one day you might find yourselves actually fighting a REAL socialized medicine proposal.
I am not fundamentally against a national single payer healthcare system as long as it treats everyone equally. What we have now is handouts for some at the cost of others while the others get to pay for their own healthcare as well. We basically put into taxes what insurance companies and hospitals were charging to the public for free care they gave out. We also pushed the expanded Medicaid cost cart down the road for the states that expanded coverage by having the Feds cover it with debt for the first couple of years. Soon, states will have to start picking up a portion of their costs and the states are not allowed to float debt like the Feds. It will be interesting budget times in those state houses when the bills start climbing.
I was just surprised that so many on the left have given up on single payer to the point they argue against it now.
But it wasn’t free care. We all end up paying for that in higher costs. We all end up paying for that in the overall loss to the economy of medical bankruptcies and the like. Our existing system was and remains extraordinarily inefficient. But it’s the system we’re stuck with because whenever people have tried to get universal coverage, conservatives have stopped it in its tracks — going back to the 1950s, if not before.
So I’d rather have an end to insurance companies denying coverage because of pre-existing conditions and a modicum of a safety net for those who don’t have employer-provided health insurance than nothing at all. I’d rather be pragmatic and strengthen the ACA then keep fighting that same losing battle, knowing we have even less chance of success now than we ever did. You can’t just wave a magic wand and have single payer happen. We don’t have the Congress, we don’t have any of it. It’s never happening, and telling people it will because “arrgle barrrgle revolution” is just plain lying.
I was trying to indicate that it was not free care and that the people paying for healthcare were also covering the cost for those that did not pay. My point was Obamacare didn’t really change anything with regards to that. The people are still paying through taxes to cover the costs of insuring the people that were previously uninsured. On top of that, our premiums have not gone down so the portion of our premiums that was supposedly covering this added cost has not gone away.
Well, it did in that more people are covered by insurance policies now — either as dependents now covered under their parents, eligible for policies they’d previously been denied, or able to purchase a policy on an exchange — and so they no longer have to skip out on an expensive ER bill. And actually, the number of uninsured showing up at hospitals has gone down 30%, according to this 2014 report. The American Cancer Society did a study and found more women are getting screened for cancer, and it’s a lot better to show up for treatment after a weird PAP test than to wait for abdominal cramping and more severe symptoms. So yes, it definitely changed that.
And no, your premiums might not have gone down but they haven’t gone up as much as they had been previously. Mr. Beale is in charge of the insurance packages at his workplace, and he told me that they’ve had their smallest increase in all the years he’s been doing this. Something like 3% this year, which is basic inflation. In the past they’d face a 20-30% increase, which meant they’d have to drastically change the benefit packages. This year that wasn’t necessary.
Jimbo(B), buddy:
Here’s a big old middle finger salute and a hearty, “FUCK you!” from one of the “Takerz”. I lonly wish that I was black, single and had a brazillion kidz so’s I could get me oneathem welfare Escalades.
I get that you don’t like anybody you see as getting something that they shouldn’t,–you apparently don’t get that your good luck in this life is largely because of privilege.
You ARE free to have whatever stupid set of opinions your palz at FuckTheNewzCorpse pass along to you (via whatever conduit you’re getting them through). And I am free to call you a delusional, skinflint fucknozzledouchebag–funny how cilvil liberties allow us to be uncivil–inntit?
Thank you for your typical reply DC.
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Hmmmmm
http://www.thenation.com/article/voxs-tax-calculator-is-wildly-misleading-so-we-made-a-better-one/
I couldn’t get this to work? Maybe I’ve got some kind of filter thingie? Anyway, it still doesn’t answer my main question, about how you realize the savings of a universal healthcare plan.