Zandi walks it back: Warren's plans add up, and her MFA plan won't raise taxes on the middle class

[BeyondGeography]

Link to tweet

It's no secret that I'm not a fan of Medicare for All. That's why I'm impressed that Senator Elizabeth Warren's campaign reached out to me to independently review her proposed financing plan for the program. Her numbers add up and her plan fully finances the program without imposing any new taxes on middle-class families.

...Criticism that Warren is overestimating the revenue she can hope to generate from the wealth tax is overblown. She addresses these concerns by saying she will empower and appropriately fund the Internal Revenue Service to go after those who willfully avoid paying their taxes. Enforcing our tax laws and best practices on tax compliance can generate significant revenue. Closing America's tax gap — the difference between taxes owed and taxes paid —would help Warren get the revenue she needs.

To be sure, these aren't the only taxes on the wealthy that Warren has proposed. In addition to the wealth tax, which she also uses to pay for her child care, college affordability and K-12 education plans, she wants a larger estate tax to pay for her housing plan, higher payroll and net investment income taxes would go toward her Social Security reforms, and she supports repealing Trump's tax cuts for high-income households to generate even more revenue for her plans. With this combination of tax changes, there is a reasonable concern that the wealthy will work overtime to avoid paying.

But once we start to consider the broader consequences of the totality of Warren's plans, it's incumbent we do so with regard to both her tax proposals but also the investments those taxes will fund. Based on my own analyses, Warren's plans for child care, housing and green manufacturing would spur economic growth and produce more tax revenue. Considering the economic impact of all her proposals (an analysis no one has done yet), it is very possible that total government revenues generated by her plans will exceed the total amount of new investments she proposes. Criticism that Senator Warren's Medicare for All plan can't be paid for, at least not without putting a greater financial burden on lower- and middle-income Americans, is wrong.

[Demsrule86]

1. Yeah ok...I do not believe it...we will pay for it one way or the other...and since it would destroy

the ACA...and it won't ever become law, we would once again be left with no health insurance... after the sacrifices we made in our party to get Americans health care, I find that unacceptable.

[jcgoldie]

15. How is it going to destroy the ACA if it doesn't become law?

[Demsrule86]

17. Attempting to pass MFA and implement it will take away needed reforms for the ACA...just

running on it is bad news for us and I think could influence the court decision coming in a negative way. Why even Democrats do't support it...We need to shore up what we have...if we attempt to pass MFA and fail, we will IMHO, risk losing the ACA... Trump has really wounded it. We should run on the ACA with a public option and leave MFA behind. I don't get why we want a 60 year old (almost) program that after dealing with it with my sister in law these last weeks is far from perfect...we could do better and come up with something for the 21st century.using the ACA as a starting point. Why reinvent the wheel?

[JoeOtterbein]

2. K n R !

Thanks for posting!

[HerbChestnut]

3. The promise of increased tax revenue through economic growth is a hollow one.

Republicans use it all the time, most recently when trying to justify cutting taxes for the wealthiest people in the country. I support M4A, and I like Warren, but this financing plan seems like a stretch.

[BeyondGeography]

4. You're missing an obvious difference

This is redistributive. Money flows into the hands of people who will immediately put it back into the economy; increased pay for child care workers, young people under $1.2-$1.5 trillion of student loan debt, freeing that same group from borrowing for tuition etc. To compare this with a handout to the rich is ridiculous.

[BlueMTexpat]

5. Well-stated!

[HerbChestnut]

6. I don't doubt that's the intention, and it might even work.

But what if those other plans aren't put into effect and the extra revenue isn't there? Do we just give up on M4A?

[BeyondGeography]

9. Not at all

There are the things you can do right away to help people and that which takes time. HC costs are a national emergency but changing the insurance paradigm will take up to 10 years. Much of the country needs an immediate economic bailout, and improving their financial situation will put them on a firmer footing to deal with all of their expenses, including health care. I have no doubt that M4A would be a priority for Warren because in addition to the inhumanity of the current system she knows that getting that expense number way down, from 18% of GDP currently to closer to the 11% that other western nations spend, is an essential part of restoring fairness and balance to our economy.

[HerbChestnut]

10. Eh, I don't know.

I think the simplest and most effective way to finance M4A is to pass the bill with a funding mechanism. That way there's less room for political BS down the road, and if I have to pay a bit more in taxes per year that's fine because it will still be way less than what I pay for private health insurance.

[Blue_true]

16. You totally missed the connection.

There is a marked difference between investing money in society and cutting taxes for the rich.

Republicans claim that giving the rich and rich companies tax breaks will spur growth because those companies and people reinvest the money. In fact what happens is companies buyback stock and hand out big executive bonuses, none of which induces growth and more tax revenue from that growth.

Warren's plan invests in people's lives, save them money and time. Because most of those people are not rich, they spend the money saved on consumer goods and items for their home (home improvement). That spending directly boosts growth and generates new tax revenue at two or three levels.

[HerbChestnut]

18. I never equated the two other than to say both are being justified by promising future revenues.

In Warren's case, I'm skeptical this plan will come to fruition because it hinges on several other plans passing through Congress in their entirety.

[Blue_true]

19. Fair enough point. I actually favor tweaks to the ACA to close the coverage gap,

but leave people that have company paid insurance alone. We can set a feature in the ACA where small companies can enroll their employees and pay the premiums, this would give small companies the type of scale that reduces their premium rates for good coverage. Currently insurance companies can isolate small companies, letting those small companies into the ACA on behalf of their employees would allow those small companies to clump to form a massive buying group - insurance companies won't be able to isolate them and stick them with higher rates.

[evertonfc]

7. moot point

It's not a winning message. I'm for it but Warren will not win a GE with this

[PubliusEnigma]

8. There is no such thing as a free lunch.

[Hassin Bin Sober]

12. Maybe it's time the insurance business learns that lesson.

This model of extracting profits from healthy people while they are young and then pawning them off on the government when they are old and sicker is unsustainable.

[PubliusEnigma]

14. The industry has to be strangled slowly.

If we try to drop it all at once, it will never die.

[oldsoftie]

11. He also said he prefers Pete Buttegeig's plan over Warrens.

And you cant quantify guesses. 1/2 her revenue estimates come from "Cut fraud waste and abuse" and other vague plans.
We've heard this line for 40 years from every candidate. yet regardless of who wins, the projected savings never come close to the estimates. No one wants their budgets cut, no one wants their programs cut, etc.
And you cannot use revenue that will come from growth you THINK will happen. And everytime we hear THAT one, the growth needed never materializes.

I see "vanishing" assets starting as soon as Warren is the nominee.

[Hoyt]

13. I think Zandi is having trouble telling the truth. He's not a fan of MFA, and he says he doesn't

think the wealth tax will fund all her programs she's promising.

I think these comments are closer to what he believes:


https://www.reuters.com/article/us-election-warren-healthcare-exclusive/exclusive-economist-who-backed-warren-healthcare-plan-has-doubts-about-her-wealth-tax-idUSKBN1XI01T

". . . . . Yet Zandi warned the wealth tax revenue predictions may not hold up if she also simultaneously tries to fund her proposed expansion of government programs, including free child-care and student debt forgiveness.

“I’m skeptical the wealth tax will generate the same amount of revenue after considering all her plans together,” he said.

". . . . . Zandi said despite signing a highly touted letter last week backing the calculations for Warren’s Medicare for All plan, he does not support shifting Americans off the private health insurance they have in favor of a single-payer, government-run regime.

“I am not a fan of Medicare for All,” said Zandi, who is not affiliated with any Democratic presidential campaign and does not speak for the Warren campaign. “We have 160 million people who have private insurance and are pretty happy with what they have. Why change that? . . . . . .”

[dansolo]

20. It isn't hard to have made-up numbers add up

The problem isn't the math, it is the cost estimates and revenues. She uses cost estimates that are completely unrealistic, and she assumes revenues that aren't guaranteed. That is Republican math. The math that supported the Trump tax cuts also added up - until it didn't.

[BeyondGeography]

21. Another poster equating redistribution to working people with handouts to the wealthiest

The impacts are obviously different. As if it needs to be stated.

[dansolo]

22. I did no such thing

I criticized her numbers. That is all. I don't accept a politician's made up numbers just because they happen to have a D next to their name. I'm not an ends justify the means person, and I expect our side to deal with facts and not fantasies.

[BeyondGeography]

23. You said "Republican math"

That’s shorthand for the voodoo of supply-side economics and the supposed stimulative effects of tax cuts. Warren isn’t cutting taxes on the rich, she would raise them and redistribute the funds to people who would immediately put the money into the hands of people who would immediately spend it on essential needs.

Disagree with the wealth tax if you want to channel neoliberals like Larry Summers if you will, but at least use terms and arguments that are relevant.