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Elizabeth Warren’s ‘Medicare for all’ pitch would fail a Facebook fact-check


Much has been made recently of Sen. Elizabeth Warren’s demand that Facebook fact-check political ads. Most political campaigns would be pretty empty if promises and policies were held to any useful standard of accuracy, but the Massachusetts Democrat doesn’t seem to care about that reality.

Yet instead of debating the practicalities, let us for argument’s sake embrace Warren’s idea, and use it as a litmus test for her own proposals: Would the candidate be allowed to advertise on Facebook under her proposed rules? The short answer is no. Warren’s claim that we can have “Medicare for all” without raising middle-class taxes would never make it past any serious fact-checker.

To start, consider the technical details.

Warren argues for a financial transactions tax, something I’ve done proper peer reviewed research on. Everyday people end up paying this kind of a tax, as we get lower pensions as a result.

Additionally, we could consider wage cuts a tax upon working people. And Warren’s plan calls for all doctors and nurses to get paid less — that’s what “lower reimbursement rates” means. Paying nurses less is basically a tax on middle-class nurses and their families.

Now, all of these examples of tax increases in Warren’s plan are perhaps arguable, in the sense that the Internal Revenue Service isn’t asking for the check directly from those middle-class families. They still might be enough to cause Warren a problem with Facebook fact-checkers.

Yet let’s have a look using the strict definition of a tax: A tax is money going to Uncle Sam. Sure, we might get some good or service back, but it’s still a tax. So, what taxes, if any, are at the heart of the candidate’s plan to pay for “Medicare for all?”

Under Warren’s proposal, all our employer’s money that is currently spent on our healthcare instead goes to the U.S. Treasury. That’s roughly $9 trillion.

Now, currently our healthcare benefits are a part of our compensation for going to work. We hand over our labor and we get back a number of benefits: a cash wage, freebie coffee, pensions contributions, and, often, health insurance.

Warren is saying that instead of the $9 trillion going to health insurance companies, it’s going to go to the government. We might get back Medicare in the future, but it’s still a tax — it’s $9 trillion coming out of our pay benefits, and going to Uncle Sam. That’s a tax. And as it’s a tax coming out of middle-class compensation, then that’s a tax upon the middle class – an increase of trillions in middle-class taxes.

Plus, under “Medicare for all” we would no longer be paying healthcare insurance premiums ourselves, as a deduction from our paychecks. That means our pay before tax will be higher.

Which leads, in Warren’s own words, to “higher take-home pay for workers … [which] also means additional tax revenue just from applying our existing taxes — approximately $1.15 trillion if we apply average effective tax rates.” This is, obviously enough, an increase in middle-class taxes.

Warren’s “Medicare for all” plan clearly couldn’t be advertised on Facebook if we did insist upon truth and fact-checking in political advertising. So perhaps there is something to the idea, after all.

Tim Worstall (@worstall) is a contributor to the Washington Examiner‘s Beltway Confidential blog. He is a senior fellow at the Adam Smith Institute. You can read all his pieces at The Continental Telegraph.

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