Moody’s Chief Economist Mark Zandi says he has doubts over whether Elizabeth Warren will be able to cover the costs of her Medicare for All plan alongside her other government programs, according to Reuters.
Zandi, who signed a highly touted letter last week which backed Warren’s calculations now says her plan would only work ‘in isolation.’
“I stand by the funding estimates, as a standalone plan,” Zandi told Reuters.
He also doubts Warren’s central assumption; that ultra-rich people are just going to grab their ankles and hand over their money. Instead, those targeted will likely seek to dodge it.
“It’s not hard to believe billionaires are going to use every resource to avoid paying the tax,” said Zandi.
Even if the wealth tax projections fall short, Zandi believes Warren may still be able to make up the difference through other taxes in her plan, including those on corporations and employers.
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. –Reuters
“I’m skeptical the wealth tax will generate the same amount of revenue after considering all her plans together,” Zandi added.
Moreover, he’s not a fan of shifting Americans off their private health insurance plans in favor of a single-payer, government-run scheme which Warren estimates will cost an additional $20.5 billion in federal spending over 10 years – something she claims can be done without raising taxes on the middle-class.
“I am not a fan of Medicare for All,” said Zandi. “We have 160 million people who have private insurance and are pretty happy with what they have. Why change that?”
Zandi says he prefers Pete Buttigieg’s more moderate healthcare approach which does not eliminate private insurance, and would instead seek to make government plans competitive with private options in order to lower costs and potentially shift more Americans onto a Medicare for All system over time.
A Warren campaign anonymously told Reuters (with zero evidence) that other leading economists who didn’t sign last week’s letter have defended the wealth tax’s revenue estimates.
The official said the wealth tax will be straightforward to administer because it applies to only 75,000 ultra-wealthy families who typically already keep careful track of their wealth.
The wealth tax revenue estimates factored in significant discounts for evasion, and the plan includes measures to sharply strengthen IRS enforcement, the official said. –Reuters
When asked at a Thursday campaign stop in North Carolina about criticism that her plan is a “pipe dream” and fairy dust,” Warren replied: “You don’t get what you don’t fight for.”
Warren’s wealth tax as originally envisioned would impose a 2% federal tax on a person’s assets above $50 million and 1% on everything over $1 billion. Then she increased the “billionaire’s surcharge” to 6% to cover Medicare for All.
According to the letter Zandi signed, the wealth tax would generate an additional $3 trillion in revenue between 2020 and 2029.
Now, he doesn’t think it will work and would be difficult for the government to enforce.
“There will be more avoidance and IRS enforcement may not be up to the task.”