It cracks me up every time President Trump, king of the dead-on nickname, refers to Sen. Elizabeth Warren as Pocahontas. It is, in one fell swoop, fearlessly politically incorrect as provocation, and brilliantly apt, given her Harvard minority job advantage and her later slender proof that she really is Native American, after all. (Her DNA contains almost one one-thousandth of one percentage point of indigenous heritage.)
Given her new plan for Medicare for All, the president might want to consider a new nickname for Warren: #GreedyLizzie.
Three numbers capsulize Sen. Warren’s plan: $52 trillion in total healthcare spending over 10 years; $20.5 trillion in tax increases in 10 years; and almost $9 trillion that government would seize from companies that would have been spent that sum covering their workers in that time. Oh, plus a fourth figure: an extra $6 trillion in a decade that the states would be required to hand over to the feds from their Medicaid programs.
Drunk with power, Greedy Lizzie wants to force a 70% reduction in all brand-name drug prices, plus a 30% cut in the prices of all generics. She aims to cap doctor and nurse salaries at lower-than-market rates, and abolish the jobs of two million people in the private health insurance industry, and wipe out the private health plans of more than 150 million Americans and force them onto the only choice: the new government plan.
Forgive my pique, but, did we just wake up in effin’ Venezuela!?
It. Is. Madness. Greedy Lizzie’s ridiculous, fantastical binge-spending plan would wreck the U.S. economy. It would crash the stock market, choke future growth, and set off a cascade of capital flight, wealth transfer, preemptive maneuvers, and new tax dodges even before she would take office.
Keep in mind that $52 trillion for Medicare for All is merely an opening bid. The study that Warren based her program on, by the Urban Institute, cites $59 billion as the more likely cost. She cut it by claiming that billions of dollars in dubious savings miraculously will materialize. (She argues her program overhead can be only 3% of expenses, half the usual rate. As if!)
Keep in mind, also, that usage increases when medical care becomes “free” of charge. So, rather than the $20.5 trillion spending increase Sen. Warren sees over ten years, the real cost increase could be $34 billion given a projected 14% increase in patients’ utilizing the health care system, the Urban Institute says.
My bet is the actual sum would exceed even that lofty figure, by far. Medicare costs always balloon far higher than the original forecasts had predicted. When the Medicare program got underway in 1966, it was projected to cost $12 billion a year by 1990; actual cost in 1990: $107 billion!
In 1965, a congressional report forecast that a one-day stay in the hospital would cost $155 in 1985 (20 years later), and that Medicare would be spending $9 billion a year on hospital costs. Reality: by 1985 a hospital stay cost $600 a day; by 1990 the Medicare budget for hospital coverage was $63 billion, up seven-fold vs. the forecast for 1985. (The figures cited in this 1993 article in Reason are like looking into a time capsule.)
Also know that Sen. Warren’s $20 trillion tax increase is on top of almost $10 trillion in tax hikes that she has called for previously, to pay for childcare-for-all, wipe out a trillion dollars in college debt, provide free-college-for-all, pay $200 a month more to (TK) million recipients on Social Security, and more, more, more. With a Rebel Yell.
Some context, then: our government collects roughly $3 trillion a year in taxes for all purposes. Greedy Lizzie wants to collect $3 trillion more per year on top of it, mostly for health care. Six trillion dollars a year. That would take tax collections up to 30% of GDP from 15%. Devastating.
Now, just on Twitter yesterday I saw local citizen video of Lyin’ Lizzie insisting only billionaires will pay higher taxes to fund the cost of expanding Medicare. That is, expanding it from its current base of 44 million people to cover every one of the living, breathing souls in our country, U.S. citizen and otherwise. Some 320 million people.
This is a Big Fat Fib. Even her rivals, Joe Biden, Pete Buttigieg, point out this farce. The center will fail to hold. Inevitably, new taxes will filter down to many more people than just the ultra-wealthy to fund this massive government takeover of healthcare.
Signs of this tax trickle-down already are evident in the Warren plan. She wants to increase corporate taxes by $2.9 trillion, and that money ultimately would come from consumers and employees. She would raise top personal income tax rates, and double the tax rate on sales of property and other capital gains reaped by all investors, rather than just billionaires.
Also, Greedy Lizzie wants to impose a new 35% tax on foreign earnings, whether they are brought back from overseas or not. That is an entirely new tax, really. And slap an entirely new investment tax on the top 1% of earners even when they hold off from selling any assets (to raise $2 trillion in ten years), another new kind of tax. And impose a new transaction tax on all stock, ETF, mutual fund, and bond buying and selling ($800 billion).
Warren also wants to impose a “risk” tax on big banks ($100 billion), and she wants to tax the money you won’t be spending on health care any longer ($1.4 trillion). She claims she can toughen up IRS enforcement to collect an extra $2.3 trillion in ten years (fat chance). As for all the illegal aliens she wants to make legal, their second gift will be that she figures they will pay $400 billion in new tax revenues in ten years.
This just in: most illegal aliens are not billionaires, either.
In addition, Greedy Lizzie aims to create an entirely new federal tax on savings and accumulated wealth, rather than stick to the old ways of taxing income and consumption. For the 70,000 families in the U.S. who are fortunate to have wealth of more than $50 million, Greedy Lizzie wants to exact a 2% tax on their holdings every year. For assets north of $1 billion, the tax triples to 6%; thus she has doubled that one from the original 3% in a matter of weeks.
Mark Cuban, my favorite investor on “Shark Tank,” tweeted out that a person with a $2.05 billion fortune would face an extra $85 million annual tax hit, even on assets that had no increase in value nor any income for the year. This billionaire would have to sell $134 million in assets to raise the $85 million tax, because he would have to raise enough money to also pay a higher capital-gains tax on the asset sale itself.
In essence, Mark Cuban says, the tax rate on that $134 million sale of assets is one hundred percent! That is outright government seizure. And it if that fails to qualify as unconstitutional, something needs fixing in our government and in our politicians.
Sure, the Billies will be just fine, no need to cry for them. To hear Greedy Lizzie tell it, they owe us, because government built the roads they use to drive to work. This is a comically stupid socialist theme. But a 100% tax rate on a business transaction — a sale forced by the need to pay a separate, new government tax — is just plain wrong. If we applaud Sen. Warren’s mean streak for singling out the ultra-rich and punishing them for their own success, shame on all of us.
Dennis Kneale is a writer and media strategist in New York. Previously he was an anchor at CNBC and at Fox Business Network, after serving as a senior editor at The Wall Street Journal and managing editor of Forbes. He helped write “Wealth Mismanagement: A Wall Street Insider on the Dirty Secrets of Financial Advisers and How to Protect Your Portfolio,” by Ed Butowsky, published in August 2019 by Post Hill Press. To read more of his reports — Click Here Now.
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