I was debating earlier today what I might write about for my next post. One option was to write about Trump’s proposed wall, and the government shut-down. Another option was to write about Democrat promises, and what they might cost. I decided, instead, to compare and contrast the two.
Let’s start with all of the Democrat proposals, from Medicare for All, to the Green New Deal, which would cost, by conservative estimates, four trillion dollars per year. Let’s break down what that means.
We currently spend 4.1 trillion dollars a year at the Federal level (including Medicare and Social Security, as well as all other federal expenses), so these proposals would literally double federal expenditures. We bring in $3.3 trillion a year, leaving a deficit of just shy of $800 billion dollars.
Let’s say that we wanted to balance the budget, and fund these proposals at the same time. We would need to tax $7.3 trillion dollars a year, rather than $3.3 trillion. In other words, we would have to more than double federal tax revenues (2.25 times to be exact). What does that look like?
Let’s start with the payroll tax that all workers pay. Currently you pay 13% of your income in the payroll tax. We’re going to make that 29.25%.
The bottom marginal federal income tax rate is 10%, and the top rate is 37%. We’ll make those 22.5% and 83.25%.
Hold the presses. Democrats only want to go to 70%. That leaves a shortfall that will have to be picked up by the lower and middle classes. To cover that shortfall, and be consistent with the Democrats’ platform, let’s make it 30% and 70%.
When you get paid, you’ll pay 29.25% of your income to the payroll tax. You’ll pay at least 30% on the rest in federal income taxes. Luckily, the income tax is applied after the payroll tax, so on the low end the income tax is only 21.225% of your gross income, Totaling up the payroll and income taxes, you’re looking at, at least 50.475% of your income.
Add in state and local taxation, which, for the average American, comes out to another 9.9% of their gross income. That brings your total income tax bill to, at least 60.375%. And that’s for the poorest American. On the upper end, the payroll tax goes away after hitting a cap, but with a 70% top rate, suffice it to say some Americans will pay a great deal more than 60.375%.
Against this, add back into your income whatever your healthcare insurance premiums currently are. Under the Democrat’s plan, you would no longer have to pay for a private health insurance plan.
You’ll notice that I am not including income tax credits and deductions in my calculations. That’s true. But then nor am I including the fact that increasing the payroll tax will reduce the percent of people’s income that is subject to the income tax. These two things will cancel-out, leaving us with a real bottom rate of at least 30%, after deductions and credits are applied.
I’m also assuming that ‘Medicare for All’ will only cost what Medicare currently costs, per person, applied toward everyone. I’m completely ignoring the fact that Medicare pays only a portion of the cost of providing care. For the purpose of this analysis, we will ignore the fact that under Medicare for All, Medicare would have to cover the full cost of providing care, and not rely on private insurance to subsidize costs…
Now let us look at additional costs people will incur. The Green New Deal will make natural gas and electricity four times more expensive than it is today.
Someone is going to click that link and notice that the article does not say renewables are going to be four times as expensive. It actually says, “astronomically more expensive.” How much more expensive is hard to say, as nobody has ever gone all-green. Germany came closest (at 24%), and their energy costs climbed to four times what Americans pay, before starting to go back to coal, to reduce energy costs. That’s where the four times number comes from. I’m being generous by saying four times, rather than simply saying ‘astronomically higher’. I could go by Canadian experiences and simply say that you will not be able to afford to both heat your home (or cool it, depending on where you live), and eat…
I’ll ignore the extra costs ridiculously high energy costs would have on food, and everything else you purchase. We’ll focus just on energy costs.
So here is what I want you to do.. Take your monthly budget, look at your monthly pay, increase your total federal taxes paid (payroll plus income) to whatever you think you would be at, based on whatever income bracket you think you’ll hit – and no matter what you make, go with at least 60.375%. Keep all state and local taxes the same. Now take your gas and electric bills and quadruple them (don’t just look at the best month – look at the worst month too).
Guess what folks… It’s not ‘free’. Most Americans would be so far in the red as to not be able to see straight, and would have to make radical lifestyle changes to survive.
And I’m not even considering the impact such high taxes would have on the desire to work. I’m assuming the absolute best case scenario, and I’m being as generous to Democrat proposals as humanly possible.
Against this, let’s look at the cost of Trump’s border wall. It would cost, depending on the options used, between eight billion dollars, and seventy billion dollars, with a maintenance cost of between $150 million and $750 million per year. Throw against that the fact that illegal immigration costs the United States $113 billion per year.
Only about half of all illegal immigrants cross the border illegally. The other half are visa-overstays, which the wall would not stop. Also, walls are not 100% effective, so we would only save 45% of the $113 billion a year we spend on illegal immigration, with a wall (I’m going with Republican estimates of a 90% effective wall rather than the 99% effectiveness other walls have had). Still, that’s $51 billion a year in savings, vs. no more than $750 million a year in maintenance (and a one time cost of between eight and seventy billion dollars).
No matter how you slice it, Trump’s wall would pay for itself many times over, as soon as it is built.
Democrats claim to be in favor of border security, but their unwillingness to fund a wall shows their true colors on this issue. Border security is a popular issue in America today, and though Democrats are in favor of not losing votes, they are dead-set against border security.
Democrats on border security are just like Republicans on spending cuts: they are all for it until you get specific, and then they are not for it at all…
When Democrats complain that the half of all illegal immigrants are visa-overstays, I ask them this: “If we could stop half of all murders for $8 billion, would you support that? If we could stop half of all rapes for $8 billion, would you support that? If we could stop half of all muggings for $8 billion, would you support that?” If we could stop half of just about any problem our country faces for $8 billion, Democrats would be all over it. To stop illegal immigration? Democrats say, “Not one penny.”
But Democrats will spend four trillion dollars a year on other things.
As for balancing the budget under Trump.. If we can get healthcare costs under control, as per Rand Paul’s healthcare bill, we can balance the budget without raising taxes.
Democrats call that a no-go.