2020 Dems' free cash handout plans to cost taxpayers billions
2020 Democratic presidential candidates have drawn interest and criticism for proposing a host of free services in the run-up to the election – including free medical care for undocumented immigrants – but a handful of them are promising to give out free money, too.
Tech entrepreneur Andrew Yang’s flagship policy, for example, is a universal basic income (UBI) plan, whereby he would guarantee every American over the age of 18 $1,000 per month.
According to a research paper written by two University of California, Berkeley, experts, a UBI program that would be vast enough to increase transfers to low-income families would be “enormously expensive.”
“A ‘pure’ UBI (providing a set benefit to all regardless of income, age, etc.) funded to meet basic needs for a household without earnings would be extremely expensive, about twice the cost of all existing transfers in the U.S.,” researchers wrote. “Funding this would require substantial new revenue.”
The research did not directly refer to Yang’s proposal, though he has said he would fund it by “consolidating some welfare programs” and imposing a value-added tax (VAT) of 10 percent. A VAT is levied on the production of goods or services produced by businesses. Yang has estimated this VAT will raise $800 billion in revenue.
California Democrat Sen. Kamala Harris’ LIFT – or Livable Incomes for Families Today – the Middle Class Act, would provide families with a refundable tax credit for as much as $6,000 per year, or $500 per month, to live on. For individuals, the amount would be halved to $250 per month or $3,000 per year. The payouts would be phased out as incomes increased.
The credit would be available for all households earning under $100,000 per year and single filers earning under $50,000 annually.
Harris’ office told Politico that as many as 80 million Americans would benefit from the proposal, however, cost estimates are as high as $200 billion per year. Harris has proposed repealing parts of President Trump’s tax cuts to pay for her legislation.
New Jersey Sen. Cory Booker’s free money proposal is a bit different – he wants to begin a government-run savings program for children. Those funds would be used to pay for things like college, a home purchase or starting a business.
The savings account, given to every newborn, would begin at $1,000. A family’s income would determine the amount that would be contributed throughout subsequent years.
Children growing up in households with incomes of $25,100 or less, for example, would typically have more than $46,210 by the time they turn 18. Meanwhile, those from families with incomes of $125,751 or more, would have just about $1,680.
Booker’s campaign said the program would cost about $60 billion per year – to be paid for by increasing the estate tax, adding new surtaxes on some estates and eliminating loopholes in the capital gains tax.
Author Marianne has proposed paying reparations for slavery – which would be allocated to a designated fund for projects. She has suggested putting $600 billion toward a Reparations Plan for African Americans – which is an educational, economic and cultural fund that would be disbursed over a decade.
Democratic presidential candidate author Marianne Williamson speaks during the Democratic primary debate hosted by NBC News at the Adrienne Arsht Center for the Performing Arts, Thursday, June 27, 2019, in Miami. (AP Photo/Wilfredo Lee)
As previously reported by FOX Business, there are a number of other proposals that carry hefty price tags, too.
Sen. Bernie Sanders’ Medicare-for-all proposal, according to one estimate, could cost as much as $32 trillion.
FILE - In this April 4, 2018, file photo, U.S. Sen. Bernie Sanders, I-Vt., responds to a question during a town hall meeting in Jackson, Miss. Sanders announced Monday, May 21, 2018, that he intends to seek re-election in 2018. (AP Photo/Rogelio V. S (AP / AccuWeather)
His student loan cancellation and free public college plan carry an estimated price tag of $2.2 trillion. A similar plan put forward by Sen. Elizabeth Warren could cost $1.25 trillion.
U.S. Sen. Elizabeth Warren, D-Mass., a candidate for the 2020 Democratic presidential nomination, speaks during the National Action Network Convention in New York, Friday, April 5, 2019. (AP Photo/Seth Wenig)
The climate change proposal known as the Green New Deal has projected costs of $93 trillion over the course of the decade – and could cost the average U.S. household anywhere between $70,000 and $100,000 during the first year after its implementation.
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Common proposals to pay for these programs often rely on raising taxes on wealthier Americans – i.e. Warren’s ultra-millionaires tax – or imposing things like a financial transaction tax on Wall Street.
Fox News’ Ronn Blitzer contributed to this report.