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Democratic presidential candidate US Sen. Elizabeth Warren (D-MA) participates in a Presidential Candidates Forum at the NAACP 110th National Convention on July 24, 2019, in Detroit, Michigan. | Bill Pugliano/Getty Images
A per-employee fee is more popular than a payroll or income tax.
Elizabeth Warren wants to finance a single-payer health care system by, in part, requiring employers to take their current per-employee spending on health insurance and kick it over to the government instead.
This helps her achieve her desired talking point that the plan does not involve an increase in taxes on the middle class. But it’s also a highly unusual program design that you don’t really see in foreign health care systems. And as her plan acknowledges, it wouldn’t really be sustainable over the long run to have different employers facing sharply different health care costs when their employees are all getting the same health care regardless.
Bernie Sanders, who has not released a similarly detailed financing scheme, has criticized this idea and instead touts an employer-side payroll tax and an income tax hike (with an exemption for low-wage workers) as better financing mechanisms.
Somewhat contrary to the main public image of the two New England progressives, Sanders’s idea here seems more technocratically sound while Warren has basically chosen to fulfill a talking point at the expense of sound program design. On the other hand, you can’t change the health care system unless you win the election first. And new polling conducted by YouGov Blue on behalf of Data for Progress confirms that with her preferred pay-for, Medicare-for-all polls better than if you use alternate tax ideas.
Three options for financing Medicare-for-all
YouGov asked registered voters three different versions of a basically similar question, trying to probe public opinion about the trade-off between replacing private health spending with taxes.
The main setup of the question went like this: “In some versions of a Medicare-for-all system that have been proposed recently, all Americans would be added to a government-run health insurance plan. This would eliminate all out-of-pocket costs such as co-pays and deductibles, and would eliminate all monthly premiums. These would instead be paid in the form of taxes. The money you pay to health insurance companies would go to the government, and the average American’s take-home pay would not decrease.”
Then they asked, “Would you [support or oppose] replacing out-of-pocket costs, co-pays, and deductibles with taxes if the tax plan included …” followed by one of three different possible options:
- … A tax on employers that requires them to pay for health care for every employee
- … A tax on individuals earning more than $29,000 a year
- … A fee paid by employers to the Medicare system for each employee they employ
The polling is decent but not amazing on all three possible answers, with the employer fee clearly garnering more support and less opposition than the employee-side tax, and the income tax option leaving a very large share of the population undecided.
The appeal of the employer fee is that by design it guarantees that nobody’s nominal costs rise. Sanders, and especially his more vociferous advocates like Matt Bruenig, counter that in the long run proportional taxes of the kind Sanders is proposing will be more favorable to the majority of the population since they raise more money from high-income people.
Indeed, it is probably true that if you could walk everyone through the math on this and — critically — get them to believe that legal tax incidence matters less than economic tax incidence, they would come around to Sanders’s point of view. But at the moment, the per-worker fee seems uniformly more popular.
The employer fee is somewhat more popular with most groups
Looking at party ID, the payroll tax option garners two percentage points higher support from Democrats but is slightly lower with Republicans, independents, and those identifying as “other.”
The payroll tax is less supported by both men and women, less supported by African Americans and whites (though slightly more supported by Hispanics), and less supported by all educational categories except “some college.”
None of these differences are particularly large, reflecting the fact that the topline polling gap between these options is modest.
Poll numbers obviously don’t change the fact that a payroll tax would probably be more financially advantageous for most people. But in a world where even if the 2020 election goes extremely well for Democrats there is extremely little chance of a full-blown Medicare-for-all plan being enacted, all these proposals are campaign props more than real policy blueprints. And Warren has narrowly succeeded in crafting the prop she needs — something consonant with her “plans” schtick (which Sanders’s purposeful vagueness would not be) that also polls well.
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