By: Maybeh Finder

The short answer: yes. The long answer is:

The next way we could pay for new Medicare program is to end tax loopholes that the rich and large corporations use. These closures, under the best circumstances, could raise $1.4Tn/Year towards the program. One argument against this idea is that companies may find more loopholes and rich people may leave the country, which would impact the revenue amount. A safer estimate for how much this would save is $800Bn/Year, which is a lot, but much less than the $1.4Tn/Year. This would bring our Medicare for All deficit to $1Tn/Year.

Now the question in all of your heads is, "How would we pay for the $1Tn?" The answer is simple, increase taxes. Even after closing loopholes, we could still increase corporate taxes without affecting the bottom line of many businesses. About 27% of businesses offer health insurance, with the average health insurance plan costing $6,700 per employee per year. There are 140 million wage earners in the US, and about 1/4 of them receive health benefits from their workplace, about 35 million Americans. If we raise corporate taxes on these companies by 80% of their expenditure on health insurance, about $5,000 per employee, than we would raise $175Bn/Year in new revenue, lowering our M4A deficit to $825Bn/Year. You might say, "Well won't this punish companies who give health care to their employees in the first place?" The answer is: no. Those companies would be the ones that would benefit the most from this plan, in fact, since they are the only companies that pay for health insurance in the first place.

The average American household currently pays $2,000/year in health care, so if that expense were eliminated and taxes were raised $1,500/Year, the average American would save $500 per year. This tax would raise an additional $487.5Bn/Year, bringing the increased deficit down to $337.5Bn/Year. We could also implement a wealth tax , which would decrease wealth inequality and raise $200Bn/Year, bringing our deficit down to $137.5Bn/Year.



Next, let's discuss the capital gains tax. The capital gains tax rate is 20% of the ultra-wealthy, lower than what most people pay in taxes. About $584Bn/Year in revenue is generated by the top 1% in capital gains, which results in about $116Bn/Year in capital gains revenue. If we increase the capital gains tax rate to 35%, the revenue amount would jump to $200Bn/Year. On the downside, raising this tax would lead to a decrease in investment, so a safer revenue amount to assume would be $175Bn/Year, a $60Bn/Year increase in revenue, lowering our deficit to $77.5Bn/Year.

We could also impose a financial transactions tax, which would generate $200Bn/Year in revenue , covering the amount of the remaining deficit and resulting in a surplus of $122.5Bn/Year.

So, in the end, we can technically pay for M4A, but there would be adverse effects. Would these effects outweigh the benefits of Medicare for All or would the benefits outweigh the impact?

The impact of Medicare for All:

First of all, the question that is likely in your mind right now is "what would we do with the extra $120Bn/Year in government revenue?" The answer is one of two things, either free college or decreased deficits. Let's model the economic impact of both.

Money used to decrease deficits:





Due to decreased spending on health insurance minus increased corporate tax rates, corporations would have about $17.5Bn/Year in extra money. Some of this money would go to increased wages, some to decreased prices, some to increased production, and some just to increase profits and build up shareholder wealth. Because of the wide range of different potential uses for the money, it is hard to calculate its multiplier effect, so we'll assume an average marginal propensity to save 10%. Using this estimate, we could potentially see a multiplier effect of 10, but for the sake of fairness, we'll use a more conservative assumption of 7.5, leading to economic growth of $130Bn/Year in the long term.





I also calculated that the average American household would save $500 a year in decreased health care spending minus increased taxes, resulting in $70Bn more in household net revenue. Because the average American household saves 8% of their income, a conservative estimate for the multiplier effect for this increased revenue would be 10, leading to an increase in the long term GDP of $700Bn/Year.









Now for the negative effects of increased taxes. The effects of increased corporate and individual taxes were already calculated by subtracting the decreased expenses of no more health care insurance minus the increased expenses of increased taxes. So, in conclusion, the good parts of the Medicare for All plan would be an increase of $990Bn/Year in our economy, call it $1Tn/Year for the sake of simplicity. That's a 5% boost in our economy, plus we would have better health performances, longer life expectancies, and an overall boosted quality of life, as well as having the pleasure of saying that we "decreased the national deficit."Now for the negative effects of increased taxes. The effects of increased corporate and individual taxes were already calculated by subtracting the decreased expenses of no more health care insurance minus the increased expenses of increased taxes.



The Wealth Tax and Financial Transactions Tax would have very little impact on the economy because of the extremely low rate of taxation. Nevertheless, there would be an impact, so a safe estimate would be about -0.25% in economic growth, bringing our total growth down to 4.75%.









The Wealth Tax and Financial Transactions Tax would have very little impact on the economy because of the extremely low rate of taxation. Nevertheless, there would be an impact, so a safe estimate would be about -0.25% in economic growth, bringing our total growth down to 4.75%.Next, the Capital Gains Tax. This tax would drive many investors to invest more of their money in non-US markets, and would significantly lower GDP. -1.25% to the GDP is a reasonable estimate, bringing our economic growth down to 3.5%, or about $685Bn.