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While it certainly was not Trump’s intention, his controversial tariff scheme may have inadvertently paved the way for a universal healthcare system in the United States, a move that a conventional presidency might have never facilitated.
Trump’s tariff strategy potentially opens the door for Democrats to champion and succeed in implementing Medicare for All (M4A), a long-cherished goal for progressives, in two significant ways. Firstly, Trump’s tariff plan, essentially a massive tax increase, slipped by almost unnoticed by the media. Democrats should demand similar treatment when pushing for M4A.
The second reason is that Trump’s tariffs indicate that it is politically permissible to tax the middle-class. Trump’s tariff strategy results in a substantial annual tax increase for middle-income households. If such a tax increase is politically tolerable, then surely the comparatively modest tax hikes required to fund M4A would also be politically viable.
Regarding the first point, while Trump did mention tariffs during his campaign, there was little discourse about the magnitude of these tariffs and their impact on middle and moderate-income households. Consequently, many people, even those who follow the news closely, were taken aback by the scale of Trump’s tariffs, leading to an immediate stock market reaction post Trump’s tariff announcement. If investors had anticipated anything akin to the tariffs Trump is implementing, the market would have already adjusted for their impact.
To clarify, while the media noted Trump’s tariff calls, they never demanded or received detailed specifics. In contrast, whenever Vice-President Harris or other Democrats suggested proposals like one for covering assisted living for senior citizens, the media persistently demanded exact funding details. Democrats need to adopt a bold approach like Trump’s when interacting with the media. They can articulate that they will implement an improved M4A covering dental, vision, and hearing, and will figure out financing because the nation is affluent: case closed. Democrats should no longer accept that the media imposes higher standards on them than on Republicans. Trump often chose not to provide answers when disinclined to do so, and Democrats might need to adopt a similar stance.
The next takeaway is that discussing tax increases on the middle-class is apparently not politically disastrous. Trump and every Republican in Congress have accepted a significant middle-class tax hike via his substantial tariffs. Since Trump’s tariffs have demonstrated that large middle-class tax hikes can be politically acceptable, Democrats need not shy away from proposing a modest one to two percentage point tax increase to ensure near-free healthcare for all.
Ideally, the majority of M4A’s costs should be offset by reduced payments for drugs and medical equipment and by realigning doctors’ and dentists’ salaries with those in other wealthy nations. Additionally, removing private insurers and replacing them with the more efficient Medicare system would save hundreds of billions of dollars annually.
Nonetheless, additional revenue will likely be necessary. While most of this should come from the wealthy, given their significant economic gains over the past half-century, it may not be feasible to derive the total needed solely from taxing the affluent.
As proponents of Modern Monetary Theory suggest, taxation primarily serves to diminish demand in the economy, thereby curbing inflation. Raising taxes on a billionaire like Elon Musk by $10 billion yearly might not significantly reduce demand, as Musk would likely continue his spending habits. However, a $10 billion increase in middle-class tax revenue would almost certainly reduce demand by the same amount, given the spending habits of this income group.
For the past two decades, Democrats have adhered to an inviolable principle of not increasing taxes on those earning less than $400,000 annually. Yet, with Trump’s tariffs confirming the political feasibility of significant middle-class tax increases, Democrats can consider proposing modest tax hikes for widespread health benefits. Any proposed tax increase can be contextualized relative to Trump’s tariffs, such as capping the middle-class tax hike at one-quarter of the tariffs’ fiscal impact.
Beyond solid policy, M4A holds substantial political appeal. Public opinion has gradually warmed to Obamacare over the past fifteen years, and even Trump now avoids openly discussing its repeal. Extending Medicare to the entire population is likely to garner extensive support due to its straightforwardness and accessibility. M4A serves as an ideal, concise slogan for the Democratic platform, resonating with voters nationwide.
While it wasn’t Trump’s deliberate intention, his unconventional tariff program might have opened the path for Medicare for All in a unique way that a typical presidency never would. Should democracy endure as we know it, tangible advancements might emerge from the Trump presidency.
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