In most Democratic presidential debates, moderators, along with most of the candidates on the stage, borrow from the GOP playbook to ask the 2020 contenders supportive of Medicare for All whether it would raise taxes on the middle class. On stage, only Sen. Bernie Sanders, who “wrote the damn bill,” would allow that his plan would do so, while noting that costs overall would go down. As Sanders often explains, “the wealthy will obviously pay the lion’s share of those taxes.”
Sen. Elizabeth Warren, meanwhile, refused to concede to moderators that Medicare for All would mean a tax hike for the middle class, insisting on pivoting directly to the question of overall costs. Warren, her campaign believed, would be handing Republicans a readymade attack ad if she publicly called for a tax increase on the middle class. But as her coy answer eventually became untenable, Warren released a plan in November detailing how she would fund Medicare for All without raising taxes on the middle class “by one penny.” She said she would finance single-payer health care with new taxes on financial firms, corporations, and the top 1 percent, among other mechanisms. To avoid raising middle-class taxes, she boosted her own wealth tax on the ultrarich.
South Bend, Indiana, Mayor Pete Buttigieg, who flipped on Medicare for All and now attacks it, has also objected to tax increases to pay for health care. “Everything that we have proposed has been paid for, and we have proposed no tax increase on the middle class,” Buttigieg told ABC host George Stephanopoulos.
“We don’t have to do it in order to deliver these health care solutions,” Buttigieg said. “There is a lot of money on the table from loopholes in the corporate tax system from the wealthiest among us who could and should pay more.”
Sen. Amy Klobuchar also made a big deal of Warren’s tax stance on the debate stage. “At least Bernie is being honest here and saying how he’s going to pay for this and that taxes are going to go up,” Klobuchar said at the October debate, suggesting that her own plan wouldn’t do so.
Despite their opposition to raising middle-class taxes to pay for health care, nearly every candidate taking the debate stage Thursday night supports legislation that would raise taxes on the middle class.
Warren, Buttigieg, and Klobuchar are all strong supporters of the FAMILY Act, a national paid leave program funded through a small payroll tax that would be paid by the middle class — though, aside from that, Klobuchar’s own paid family leave plan would be funded through a corporate tax. The FAMILY Act, reintroduced by Connecticut Rep. Rosa DeLauro and New York Sen. Kirsten Gillibrand, would be funded through employee and employer payroll contributions of two-tenths of 1 percent, or around $2 per week for a typical worker.
That might sound like an uncontroversially minuscule amount of money, and it isn’t nearly as substantial as the one to finance Medicare for All, but Hillary Clinton opposed the FAMILY Act during the 2016 Democratic primarily because of this tiny payroll tax. “I happen to think $1.61 for three months paid family and medical leave is a very good investment for working families of this country,” Sanders said at the time. The Vermont senator also criticized the eventual nominee for not having a detailed plan on the issue, saying that “she has talked in vague and general terms for paid family and medical leave” but “has not described how she would pay for it, and not supportive of legislation in both the Senate and House.”
The FAMILY Act, and Clinton’s opposition to it, is a window into why the rhetoric around “middle-class tax hikes,” deployed against Medicare for All, is so damaging to the project of expanding universal benefits broadly. By making any middle-class tax increase toxic, Democrats make the creation of new programs such as the FAMILY Act that much more difficult.
As part of their climate change platform, Buttigieg, Warren, Klobuchar, and Joe Biden have also endorsed a carbon tax that would apply to the middle class. The 37-year-old mayor, ironically, has defended the tax with an argument that it mirrors the one Sanders uses to explain raising taxes for Medicare for All. “The key to making a carbon tax work for everyday Americans is to rebate out the value to the American people every year, and do it with a progressive formula so that most people are better off than before,” Buttigieg said last month. “The idea of a carbon tax is not to suck money out of the economy and bring it into the government — at least not for me.”
Buttigieg previously defended a carbon tax at a September CNN town hall, saying “I know you’re not supposed to use the T-word when you’re in politics, but we might as well call this what it is.” Though Warren has expressed support for a carbon tax, she hasn’t gone into any detail about how she would structure such a tax. Klobuchar estimated her tax, which would not be regressive, would raise between $2 trillion and $3 trillion.
Some progressive supporters of the carbon tax argue for a tax on products that would fund a dividend to offset the disproportionate amount that climate change will affect the poor and middle class. According to the People’s Policy Project, a socialist think tank, the carbon tax would have to be “approximately $230 per ton of CO2 in 2020 to prevent temperatures from rising more than 2.5 degrees C.”
Andrew Yang, best known for his universal basic income plan to give everyone $1,000 per month, would pay for his “Freedom Dividend” with a value-added tax, according to his campaign website. “The VAT combined with the Freedom Dividend is a progressive policy that will benefit millions of Americans,” a campaign spokesperson said in a statement. “Those who spend more than $120,000 a year would not see a net increase from the Freedom Dividend, which means about 94% of Americans would see an increase in their economic security.”