Remember when Mark Kelly couldn’t (read: wouldn’t) say how to pay for his health care plan on the debate stage?
Thankfully we have experts to shed some light for us.
Economic experts from the Hoover Institution penned an op-ed in the Wall Street Journal today outlining just how disastrous the Democrats’ “public option” plan would be. Not only would the “public option” lead to the total government takeover of health care—meaning 178 million Americans kicked off private insurance and skyrocketing out of pocket costs for Arizonans—but also would require massive tax hikes.
Here are the topline numbers from the study on which the op-ed is based:
- $800 billion added to the federal deficit
- $2,000/year tax increase on middle-income families through 30% tax hikes
- $3,900/year tax increase on typical families though 180% hospital insurance payroll tax hikes
Read more about the Biden-Kelly disastrous “public option” plan below:
Joe Biden has promised that no families with incomes under $400,000 will see tax increases if he is elected president. But that’s a promise he won’t be able to keep if he gets his way and Congress creates a government-run health insurance plan—a public option.
Mr. Biden and other supporters of the public option argue it would be a relatively modest change to the nation’s health-care system…But once enrollees and health-care providers start applying political pressure to keep premiums low, taxpayers would be on the hook…
[W]e estimate that a politically realistic public option would increase 10-year federal deficits by almost $800 billion…Keeping a public option deficit-neutral would likely require a broad-based tax increase that would add thousands of dollars to a typical middle-income family’s tax bill.
The math is grim. Even without any new spending programs, we estimate that Congress would need an across-the-board tax increase of 10.4% beginning in 2026 to return long-term debt projections to CBO’s 2019 forecast. This tax increase would apply to all corporate, payroll and personal income-tax rates, and it would come on top of the scheduled tax increases from the expiration of the Tax Cuts and Jobs Act of 2017. Returning to the 2019 forecast is hardly ambitious; debt would still approach 150% of GDP by 2050.
Mr. Biden contends that tax hikes on the rich will be sufficient to pay for his new programs. But the numbers don’t add up. Even before accounting for his other spending proposals—such as increasing ObamaCare subsidies—a public option would require record high tax increases on corporations or high-income taxpayers. We estimate that to pay for the public option, corporate tax rates would have to rise from 21% today to 58% over the next 30 years. Alternatively, Congress could raise the top three marginal tax rates. But between financing the public option and keeping debt below 150% of GDP, the top rate would eventually exceed 60%—higher than at any point in the past 40 years.
Instead, lawmakers might consider raising personal income taxes for all taxpayers. An across-the-board tax hike would increase all personal income-tax rates more than 30% by 2050. Middle-income families would see their taxes rise by $2,000 a year in inflation-adjusted dollars. Middle-income taxpayers would pay a marginal federal income tax rate of 32.6%, and the top rate would need to be above 50%—levels not seen since 1981.
Still, while illustrative, the tax increase scenarios should serve as a warning. Campaign promises for large new spending programs and no new middle-class taxes are easy to make, but the bill will come due at some point. And the burden will fall on future taxpayers who will be forced to pay for the broken promises of today’s politicians.
Read the full oped here.
By: Caroline Anderegg