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  • 2019-10-30 (xsd:date)
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  • Did Democrats Unveil a Plan for a 42% Sales Tax to Pay for Medicare for All? (en)
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  • Several of the Democratic 2020 U.S. presidential candidates — namely Sens. Bernie Sanders, D-Vt., and Elizabeth Warren, D-Mass. — have been running on platforms that include a plan for Medicare for All. The cost of a such a program would be substantial, and the candidates have wrestled with different ideas on how they plan to pay for it. On Oct. 29, 2019, some social media users came across an article that apparently led them to believe the Democratic candidates had come to a consensus on how to pay for Medicare for All: a 42% sales tax. Democrats have not announced a plan for a 42% sales tax to fund Medicare for All. This idea is based on a misleadingly titled news article concerning a proposal from the Committee for a Responsible Federal Budget (CRFB), an independent public policy organization. Yahoo Finance published an article entitled The Democratic plan for a 42% national sales tax. The story, however, did not actually deal with a Democratic plan for a 42% national sales tax. Rather, the article concerned a paper that CRFB published regarding possible methods to pay for universal healthcare. The CRFB estimates that Medicare for All would cost about $30 trillion over the next decade. The organization found that this program could be funded through a variety of methods, including a 42% value added tax (VAT), which the Yahoo article incorrectly labeled a sales tax. Here's an excerpt from the CRFB report that lists eight possible ways to fund Medicare for All: The CRFB also notes that Medicare for All could be funded by combining any of the above-mentioned plans. To reiterate, the above-displayed proposals were put forth by an independent think tank, not the Democratic Party. Furthermore, the CRFB suggested a 42% value added tax (VAT), a tax that is collected at every stage of the supply chain, and not a sales tax, as reported by Yahoo Finance, which is only collected by the retailer when an item is sold to the consumer. Reuters explained the difference between these two taxes: The Yahoo Finance article took one of several proposals offered by an independent think tank, incorrectly described it, and then erroneously presented it as if it were the Democratic plan in their headline. While several of the 2020 Democratic presidential candidates are running on platforms that include Medicare for All, they all have different strategies on how to implement such a universal health care system. Furthermore, as of this writing in October 2019, many of the candidates have not put forth concrete plans on how they would go about paying for such a program. Sanders, for instance, has suggested several possible methods to pay for Medicare for All, including: a 7.5% income-based premium paid by employers; a 4% income-based premium paid by households; savings from health tax expenditures; making the personal income tax more progressive; making the estate tax more progressive; establishing a wealth tax on the top 0.1 percent; imposing a one-time tax on currently held offshore profits; imposing a fee on large financial institutions; and closing various corporate loopholes. Warren has hinted at similar ideas and said on Oct. 20, 2019, that she would soon be releasing her plan on how to pay for Medicare for All: (en)
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