From the failed Clinton health plan of 1993 to the partial passage of Barack Obama’s Affordable Care Act in 2010, universal health care has long been a progressive pipe dream. But now, its latest iteration, commonly called Medicare for All, is quickly gaining traction—pushed most prominently by Democratic presidential candidate Elizabeth Warren. A recent funding plan released by the Warren campaign makes one thing crystal clear: for big business, Wall Street, and billionaires—and potentially the upper-middle class, some economists argue—the prospect of Medicare for All is grim.
According to the campaign, Warren’s Medicare for All plan would cost $20.5 trillion—more than twice the cost of all of her other proposed policies combined. The program would be largely paid for by a few different sources including increased taxes on employers and financial firms, but most radical is Warren’s direct targeting of the richest Americans.
Warren’s wealth tax would impose a 2% tax on households with net worths above $50 million and a 6% rate on fortunes over $1 billion annually. The proposed policy has already been met with criticism from Wall Street financiers such as JP Morgan CEO Jamie Dimon and the second-wealthiest man in the world Bill Gates. Warren’s plan “vilifies successful people,” Dimon told CNBC’s Wilfred Frost. American billionaire investor Leon Cooperman has publicly decried the tax, literally coming to tears in a television interview, predicting a 25% decrease in market value should Warren be successful in her bid for the presidency.
The wealth and capital-gains taxes, in conjunction with Warren’s vow to stop some of the “most lucrative” private equity practices and to break up big banks and major tech companies, have made Warren something of a Wall Street boogeyman, a status that Warren has embraced enthusiastically.
However, several economists have spoken out against the proposal for its feasibility—arguing that even if it was implemented, the richest Americans would only invest in alternative assets, or find loopholes around the tax altogether.
Moreover, the political hurdles to a wealth tax seem high. A wealth tax bill put forth by a President Warren would likely face unified Republican opposition, and could even attract defectors from centrist Democrats. And court challenges on the constitutionality of a wealth tax would be all but assured. Perhaps that’s why billionaire Michael Novogratz is not yet in panic mode. “Ninety-seven percent of the people I know in my world are really, really fearful of her,” Novogratz told Bloomberg Magazine. “It’s a little carried away.”