On healthcare, Warren gives a semi-BS answer to a BS question

Elizabeth Warren’s statements and answers in debates, interviews and speeches have consistently been impeccable—on point, accurate, and with the right balance of emotion, theory and facts. That is, except for one very sore point: her answer to the bullshit question whether taxes will go up for the middle classes under a single payer program.

The question is BS because healthcare costs consist of four parts: taxes + premiums + copays + out-of-pocket expenses. Isolating the one cost stream that may go up in a single payer system from the other cost streams, which will all go down, is a devious way to get the electorate to focus on the wrong number. The question builds on and continues the anti-tax rhetoric long employed by right-wingers, as if paying taxes were inherently bad because the money goes to the government, while paying premiums and co-pays is okay because someone is making a profit.  

The question tries to conceal the fact, that almost by definition, total costs must go down in a single payer system, because no corporate entity is skimming off profit, which amounted to $23.4 billion in 2018, which by my calculations reduces to $95.50 for every person covered by private plans. Costs will go down per person for other reasons: 1) A single payer can negotiate better rates, especially from drug companies; 2) A single payer will reduce marketing and other administrative costs; 3) A single payer can more readily implement best practice standards, which in healthcare always seems to reduce costs; 4) With everyone covered, many more people will go to doctors for preventive and routine care, lowering the cost of providing more expensive care when treatable conditions deteriorate; 5) The system will be more progressive, meaning rich folk will pay more and poor and middle class folk will pay less.

The Democrats who have joined the GOP and certain news media is posing the question, “Will taxes go up for the middle class,” should be ashamed of themselves. Mayor Pete and Amy Klobuchar both know their question is deceptive, yet they persist. Buttigieg and Klobuchar are in the wrong party if think that taxes are inherently so bad that it’s better to pay more in total if it means you avoid paying taxes.

Unlike Bernie, who bluntly states that taxes will go up but total costs for everyone will go down, Warren refuses to utter the full phrase, “taxes will go up for the middle class, but your total costs will go down.” She wants to avoid the deceptive headlines and chopped-up soundbites that will just focus on the first part of the statement. I get it. In fact, just about everyone gets it except for uninformed voters. The problem is that her adversaries keep posing the question, and her semi-weasely answer both makes her seem devious and keeps the question top of mind. Frankly, I don’t see the harm in turning the question around and saying, “You know the answer to the question is that total costs will go down for the middle class because premiums, co-pays and out-of-pockets will go down or disappear, but the one cost factor will go up.” She might ask why the questioner insists on looking at one cost factor and not all of them. 

In other words, instead of answering in a wishy-washy way, Warren should be putting the focus on the deviousness of the question.

In general, Warren, Bernie and the rest of the Democrats have not done well in addressing the issue of taxation, i.e., who is going to pay for all the great programs they propose while closing the horrific deficit that the Republicans have created by lowering taxes and force-feeding the military as if it were a goose getting ready to be slaughtered for its artificially enlarged liver.

Other than Bernie and Liz, no other candidate has proposed any new taxes. Both their plans to tax wealth start with the very wealthy, which seems appropriate. Implicit but unstated in their healthcare plans is the idea that the rich will pay more. But it’s easy to propose a 2% wealth tax on the ultra-rich. You can do that without questioning the false notion that taxes are bad and that taxes on the wealthy are the worst because the wealthy create jobs. 

Every Democratic candidate on the stage for the October debate (except the right-wingers Steyer, Klobuchar and Buttigieg) should be reminding Americans frequently that forty years ago when higher education was cheap, roads and bridges were in good repair, we spent more per capita on basic and applied scientific research, and the social safety net was stronger, the top 1% paid more than 50% of all income above about $500,000 a year. 

In point of fact, the decades that saw inequality increase tremendously were the very period in which taxes were cut on the wealthy and corporations (whose shareholders and executives are primarily wealthy). 

For a full discussion on how lowering taxes on the wealthy again and again has created the most unequal society in the industrialized world, everyone should read The Triumph of Injustice, by economists Emmanual Saez and Gabriel Zucman.  Professors Saez and Zucman explain in very easy-to-understand language a lot of complex issues related to taxation and wealth, and back it up with simple charts and a slew of references to research. They break taxes into its constituent parts—income, payroll, corporate and sales/use—and demonstrate that all have become more regressive over the past four decades, meaning that the poor and middle class have paid more, while the rich have paid less.

The most telling chart in The Triumph of Injustice shows that since 1978, the share of the national income earned by the top 1% has doubled from about 10% of the total U.S. pre-tax income to 20%, while the share of the bottom 50% has fallen from 20% to about 12% today. When you cut out all the middlemen, it looks like a direct transfer of income from the pockets of poor to the bank accounts of the wealthy. By the way, the good professors point out that in the rest of the world, the wealthy have only increased their share of national wealth and income by 2% in the same four decades. 

To make matters worse, the more income people make, the less of it is subject to income taxes, which are still mildly progressive, and the more of it is subject to the lower-rate corporate, capital gains and other taxes. The result is that for the first time ever, billionaires like Jeff Bezos, Warren Buffet and Bill Gates pay a lower tax rate than their secretaries and the wait staff that serves them at their chichi restaurants.

Rather than shy away from having the “tax talk” as if they were befuddled parents who are reluctant to tell their children about sex, the Dems should all be clearly stating that they will pay for new programs and reduce the deficit by returning the tax system to what it was before Reagan took office. They should make it clear that the main reason wealth inequality has grown is that rich folk no longer pay their fair share. 

What’s preventing Dems from being more honest about taxes are their wealthy donors, who don’t mind other people doing better as long as they don’t have to pay for it. But both Liz and Bernie are showing that at least in the primaries, the Dems don’t need the big donors. As long as Trump is the candidate in 2020, whoever the Dems run is going to get the support of their traditional donors because they know that four more years of the Trump regime may destroy the country and our democratic traditions.

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