How Much Would It Cost You in Taxes If We Had Universal Healthcare in America?

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Universal healthcare (UHC) guarantees every citizen of a given country access to healthcare without regard to their ability to pay. According to Visual Capitalist, 72 countries, representing 69% of the global population, use some version of this system, including Canada, Australia, Japan, Brazil, China, India and most of Western Europe.

The United States joins some of South and Central America, most of Eastern Europe and nearly all of Africa in the 31% that does not.

According to Healthcare Now, the formal movement to establish UHC began in the 1930s when healthcare was omitted from the Social Security Act. However, it has never proven politically feasible — and the potential tax implications often take center stage in the heated national debate on the subject.

A Push for Medical Equity Through Universal Healthcare

The most recent legislation to implement UHC was a bill called the Medicare for All Act of 2022, introduced by Vermont Sen. Bernie Sanders (I) in the 118th Congress. 

If passed, the bill would require the program to: 

• Cover every U.S. resident.
• Automatically enroll residents at birth or upon residency in the U.S. 
• Cover all medically necessary services and items needed for diagnosis, treatment and rehabilitation. That includes prescription drugs, hospital services, substance abuse and mental health treatment, vision, dental, long-term care and reproductive and gender affirming care. 

Sounds Great, but Who’s Paying for All of This? 

For decades, the UHC debate has included impassioned discussions on familiar hot-button issues like equity, access and control over personal healthcare. However, feasibility always comes down to cost — and a government-administered plan would require trillions of taxpayer dollars.

Sen. Sanders’ bill contained several funding provisions that were more specific and comprehensive than many that came before, including:

• Employers would pay a 7.5% income-based premium with an exemption for small businesses on the first $2 million in payroll. Sanders stated that this alone could save a family of four earning $50,000 a year more than $9,000 annually compared to employer-based insurance.
• Households would pay a 4% premium based on income, which Sanders claimed would save the typical household $4,400.
• The elimination of several tax exemptions that the bill would render obsolete, most notably, the exemptions for employer-paid premiums from income and payroll taxes. Sanders said this will generate $4.2 trillion in revenue over 10 years.

Sanders also suggested taxing capital gains as ordinary income, closing several loopholes that favor high earners and increasing some taxes on the wealthiest households, which he said would raise a combined $4.49 trillion in revenue over 10 years to fund the plan.

Would UHC Raise or Lower Your Tax Bill? It Depends Who You Ask

Unsurprisingly, Sanders’ political opposition in the Republican Policy Committee did not agree with the liberal senator’s arithmetic. It countered with a claim that UHC would increase your taxes by 20%.

With so many complexities and variables, rival politicians can and do manipulate the data to favor their position. However, the Committee for a Responsible Federal Budget, which platforms like Media Bias Fact Check and InfluenceWatch describe as genuinely nonpartisan, highly credible and factual in its analyses and reporting, identified seven ways that Congress could fund UHC if the Medicare for All bill were to become law:

• 25% income surtax
• 32% payroll tax
• 42% value-added tax
• Doubling all current income tax rates
• Mandatory $7,500 per capita public premium
• Reducing non-healthcare spending by 80%
• Increasing the debt to 105% of the national GDP

Note: Some of the stated figures are from when Congress and its many affiliated special interest groups were actively debating the Medicare for All proposal and generating data that supported their positions. However, all are either percentages that remain unchanged today or are part of 10-year projections that accounted for inflation and population increases.

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