Elizabeth Warren Wants To Raise Taxes by $26 Trillion
What she and Bernie Sanders are proposing is nothing short of a wholesale transformation of the size and scope of government.
One of the challenges presented by the leftward turn in the Democratic presidential primary race is effectively capturing the scale of the tax and spending proposals the leading candidates have put forth. The numbers regularly stretch into the trillions, or even multiple tens of trillions. To put that in contrast, a decade ago, early drafts of the health law that became Obamacare were viewed as pushing the boundaries of political acceptability because they ran just over $1 trillion over a decade. A trillion dollars! Even for Washington, that was a lot of money, an expansion of the size of government large enough to give some Democrats pause.
Today, Sen. Bernie Sanders (I–Vt.) says his Medicare for All plan would cost $30 or $40 trillion over 10 years. Sen. Elizabeth Warren (D–Mass.) has proposed $2.75 trillion worth of education policy reforms, and her notion that she could implement a single-payer health care system with just—"just"—$20 trillion in new federal spending is viewed by many as unrealistically low.
There is an element of unreality to these ideas, a sense in which they are meant as symbols and signifiers rather than practical, concrete agenda items. As Kate McKinnon's parody version of Elizabeth Warren said on Saturday Night Live this weekend, responding to a question about Medicare for All's enormous price tag, "When the numbers are this big, they're just pretend."
And yet—these are, in fact, real and nominally serious proposals from actual candidates who are actually running for president. So it is worth putting them in perspective, not only on their own, but in context with each other.
Sanders has proposed a whopping $97.5 trillion worth of new government spending over the next decade, according to an estimate by the Manhattan Institute's Brian Riedl. To pay for all that spending, Sanders would presumably give speeches about how we don't need to pay for all that spending. But he would also raise taxes by about $23 trillion over the same time frame. The federal government expects to raise roughly $3.6 trillion in tax revenue this year, and spend about $1 trillion more than that (hence our trillion-dollar budget deficit). The Sanders agenda, if enacted in full, would dramatically increase the tax burden Americans are expected to shoulder, and, at the same time, add about $90 trillion to federal deficits. The Sanders agenda manages to simultaneously be absurdly, almost comically unrealistic and economically catastrophic.
And then there is Warren and her plans, many of which involve raising taxes. Warren has not proposed quite as much new spending as Sanders, but she has proposed even more in the way of new taxation. All together, Warren would raise taxes by $26.3 trillion, according to a new report by Nicole Kaeding of the National Taxpayers Union Foundation. Warren would supplement that by freeing up some currently untaxed dollars for taxation and increasing tax enforcement, which she claims would raise another $2.3 trillion. If Warren somehow managed to pass her entire wish list, the result would be a 63 percent increase in expected federal revenues over the next 10 years, according to Kaeding.
Over that same time, total individual and corporate income tax revenues are projected to be about $26.8 trillion. "In other words," Kaeding writes, "the total revenue effects of Warren's proposals would be similar to a plan in which every individual and corporate tax bill was doubled outright." Warren's plans would amount to a historically unprecedented increase in the size and scale of government.
Naturally, there are various technical problems with Warren's plans that the headline numbers don't fully capture. Her wealth tax almost certainly wouldn't raise as much money as she hopes. The grab bag of taxes she has proposed were not designed to function in tandem, and the complex interactions between them would probably lower total revenue, which would lead to larger deficits without offsetting spending cuts. Warren has plans for all sorts of new taxes, but not for how to make them all work together.
Wonky quibbles aside, however, it is valuable to simply consider the bigger picture. The foundation of Warren's candidacy is her vast policy agenda—her plans for everything. But enacting each and every one of her plans would result, at minimum, in a profound transformation of the American economy, pulling tens of trillions of dollars out of the private sector and putting that money under the control of the federal government. The full Warren agenda would empower bureaucrats and politicians, and it would almost certainly drag down the nation's economy, affecting jobs and livelihoods for millions of Americans, many of whom would not be billionaires or even millionaires. And while Warren claims not to tax the middle class directly, she only avoids doing so through tortured workarounds that would inevitably hit middle-class paychecks.
One might argue, somewhat reasonably, that Warren's agenda is more aspirational than practical, that it's a sellable political vision, not legislative text, and that even if Democrats somehow sweep Congress and the White House next year, it's unlikely to pass in full, or even in large part.
Looked at this way, the Warren agenda (and in a different way, the Sanders agenda) is a kind of joke, a pin-up board of preposterously big-ticket proposals that rely on made-up numbers to pay for made-up programs that, like most games of make-believe, haven't been precision engineered to function in reality, because they aren't really expected to ever become law. There is a sense in which Warren, like her SNL counterpart, isn't sweating the size of the numbers involved because, well, it's all pretend.
Yet there is another sense in which the fanciful ambitions of Warren's agenda aren't funny at all, but something rather more terrifying. Because even if they do not represent a politically likely outcome, they do represent a very real worldview, a belief that the government both can and should be operating at a size and scale far beyond any precedent in the nation's history. The best way to understand Warren's tax agenda, then, may not be as a series of large numbers, but as a wholesale transformation of American life.
