European countries have a VAT that hovers between 20% and 25%

[Recursion]

That's roughly what it would cost to pay for Medicare For All.

Would you accept a 20% VAT (that's actually the low end of Europe's VAT) to pay for Medicare For All?

(Note that very few European countries have single payer -- in France the government covers 80% of healthcare costs, for instance, while in Germany people are mandated to buy insurance from a regulated provider.)

Anyways, my cocktail napkin calculation tells me that a 20% national VAT would pay to extend Medicare to everyone. Is that a package deal you would take?

(Not doing a poll; just post what you think.)

[DFW]

1. In Germany, we're still at 19%

Probably not for long.

However, I was talking to a German government official about their MWSt (VAT), and he was complaining that most or all of it has to be turned over to Brussels (the EU commission), so that money the German government has to spend must be taken from other taxes. They have enough of them! Aside from the usual income tax, there's property tax, Auto tax, "business tax (you have to pay a tax on what a business is expected to have in turnover)," "Körperschaftsteuer (I don't even know what that one is)," Mineral oil tax, and they even slap VAT on the mineral oil tax! To tax a tax, now THAT'S creative, but they do that here in Germany. A friend of mine is a judge on their tax court, and he said yes, it's probably unconstitutional, but who wants to spend a million euros and five years challenging it before the German Supreme Court?

There are still people who fall though the cracks here in Germany, and have no medical insurance at all. My wife recently retired as a social worker here, and worked with plenty of these people. Many of them were illiterate (I had no idea there were still any illiterate people in Germany, but there are, and more than a few).

In the States, you have a system where each State can (and usually does) levy its own income tax and sales tax. In Germany, for example, the "Bundesländer (States)" don't do that, so the VAT takes its place. I don't know how much luck you'd have convincing the individual States of the USA to either give up their individual sources of revenue, or, worse, accept a national VAT on top of their local taxes. Probably no Senator or Representative voting in favor of either solution could ever get past a primary. Of course, in our case, any VAT would not go to some higher authority like the EU, but go right to the Federal Government. However, if it would be anything like Europe, we would quickly find that a VAT is like government heroin: it's very addicting, and ever higher doses are needed to maintain the high.

Here in Germany, they enacted a 5.5% "Solidaritätszuschalg (solidarity surcharge)" to everyone's income taxes and to two other taxes--that way, the money stays in Germany--for as long as it took to rebuild what was East Germany. It was thought that this would take 15 to 20 years. Well, here we are 25 years later, and the German Federal government finds that it likes the extra revenue coming in even though it no longer needs it to rebuild East Germany, so now it's as good as permanent. Anyone making €100,000 a year finds themselves in around a de facto 50% tax bracket, and that's just the income tax before any other stuff.

There is also the issue that a VAT disproportionately hits low income people the hardest, as they are the ones who can least afford to pay an extra 20% for food, clothing and housing.

[ileus]

2. Only if there were no other costs.

Even then 20% is a huge chunk of change, during your working years.

Now if that 20% covered everything else, that wouldn't be a bad deal.

[SoCalNative]

3. To be fair

the VAT varies in locations depending on what the item is. In the Netherlands it's 21% overall, but a lower rate of 6% applies for certain goods and services, such as food products, books, medicines, art, antiques, entry to museums, zoos, theatres and sports.

[pampango]

4. The VAT is somewhat regressive (like FICA) but, if it is used for progressive programs

and not to fund the military and more tax cuts for the rich, I could support it.

[Fumesucker]

5. A graduated VAT combined with a $15 minimum wage with a real COLA

By graduated I mean that necessities such as food, shelter and so on are taxed at a significantly lower rate than say, yachts or diamond encrusted iPhones.

Also by law no VAT funds can be used for any military purpose, that has to come from general taxation.

There are a lot of other details that would have to be worked out but I'm not in theory opposed to it.

[dawg]

6. I seriously doubt your cocktail napkin calculation, considering that ...

everyone over 65 (the most expensive cohort by far) is already covered; and that coverage is funded by a 2.9% payroll tax.

[Recursion]

8. And that's about 14% of the population

https://www.cms.gov/Research-Statistics-Data-and-systems/Statistics-Trends-and-reports/NationalHealthExpendData/index.html

Read it.

Come back after you have.

[dawg]

11. Your own link says that Medicare is already 20% of total health spending and Medicaid ...

is another 15%. You are being disingenuous in your claims, and I'm not sure why. Your link also claims that private insurance is only 33% of total healthcare spend right now, and presumably some of that would be government subsidized ACA policies.

Counting the elderly and disabled as only "14% of the population" is an obvious attempt to be slick. They punch far above their weight when it comes to health care expenses. Everyone knows that.

I would never argue that we could have Medicare for all without raising taxes significantly, but you are being purposefully deceptive in your arguments. It doesn't make me want to take you seriously, nor does it make me want to be particularly interested in anything else you have to say.

[Recursion]

13. Yes, we cover 14% of the population with 20% of the costs, which was my point

We still have to cover the 51% of the population with private insurance.

I would never argue that we could have Medicare for all without raising taxes significantly

It sure sounds like you're trying to.

[dawg]

14. No. You are being purposely deceptive with your numbers.

Why?

Even now, after being forced to admit we are already covering more than 14% of costs, you cling on to the 20% number, ignoring the other 15% that we are also already covering through Medicaid.

That's 35% of medical costs we are already paying directly right off the bat.

Add the ACA subsidies, VA benefits, and government worker health plans to that, and it is plain to see that we are already paying a significant portion of our total health care expenditures through the federal government.

But you want to make is sound like it's only 14%.

Why?

[Recursion]

15. "Forced to admit"? I claimed we cover 14% of *people* with Medicare

You made up this 14% of costs straw man.

Do the numbers yourself and come back, or see my OP on this where I put the numbers out very clearly.

[PoliticAverse]

10. Medicare parts B and D aren't funded by the payroll tax,

they're funded from the government's general revenue and Part B and D premiums paid by
participants.

See: https://www.medicare.gov/about-us/how-medicare-is-funded/medicare-funding.html

[Yo_Mama]

16. 2.9% FICA share only covers 38% of Medicare spending. General revenue covers 41%/

So you are wrong about your claim. Quite wrong. Here's a lot of information from kff.org:
http://kff.org/medicare/fact-sheet/medicare-spending-and-financing-fact-sheet/

?w=735&h=551&crop=1

[Downwinder]

7. Considering that medical (Medicare, supplemental, drug plan)

Last edited Sat Oct 31, 2015, 01:19 PM - Edit history (1)

not including any co-pays eats up %30 of my income, I would be a fool not to support an extra %15 VAT. Does theirs cover dental, vision and hearing? Mine does not.

Correction on edit.

2016 is projected to be %40

[1939]

9. I guess the beauty of the VAT

Would be in the very clear cut trade-offs Congress can present to the public.

A VAT in the amount of n% will cover Part A medicare for all

Increasing the VAT to n+a% will allow everybody to buy in to Part B

Increasing the VAT to n+b% will pay for Part B for all.

Increasing the VAT to n+c% will eliminate deductibles and co-pays.

Increasing the VAT to n+d% will pay for PAT D (all prescription drugs)

Other possibilities for increases would include: vision, dental, psychiatric, long term nursing care, cosmetic surgery, etc.

The VAT and what it covers would be totally off-budget and a completely separate appropriation.

[Donald Ian Rankin]

12. Only if not given other options.

I'd prefer, say, higher income tax to higher VAT, and in particular I'd prefer higher inheritance tax to increasing just about any other form of taxation.

[eridani]

17. We pay twice as much per capita NOW compared to these countries

As Kucinich said in 2004 "We are already paying for universal health care--we just aren't getting it."