Buttigieg Eyes 35% Corporate Tax Rate to Fund Health Plan

(Bloomberg) -- Pete Buttigieg would pay for his $1.5 trillion health-care plan by rolling back President Donald Trump’s corporate tax cut to return the rate to 35% and allowing Medicare to negotiate drug prices, campaign spokesman Sean Savett said.

Buttigieg’s “Medicare for all who want it” plan would extend the federal health-care program for seniors as an option for Americans who prefer it, while also letting people opt for private plans. It’s a centerpiece of his campaign, positioning himself against the more far-reaching “Medicare for All” plan by Vermont Senator Bernie Sanders and Massachusetts Senator Elizabeth Warren, which would put all Americans in Medicare.

The specificity from his campaign comes days after Buttigieg ripped into Warren during Tuesday’s Democratic presidential debate in Ohio for being evasive about how she’d finance her plan. Some of Warren’s allies noted that the South Bend, Indiana, mayor hadn’t detailed his pay-fors beyond broadly calling for “cost savings and corporate tax reform.”

Buttigieg said he would repeal the corporate tax cut in the 2017 Republican tax law enacted under Trump, which lowered the rate to 21% from 35%. That would raise an estimated $1.4 trillion, according to the non-partisan congressional Joint Committee on Taxation.

“The vast majority of that can be recovered by rolling back the corporate tax rate cut portion of the Trump tax cuts,” Buttigieg said Sunday on NBC’s “Meet The Press.”

Negotiating Prices

Savett said Buttigieg would also seek savings by allowing Medicare to negotiate drug prices, capping out-of-pocket pharmaceutical costs and imposing penalties on drug companies that raise prices at a higher rate than inflation.

Buttigieg is competing for fourth place in the Democratic race with California Senator Kamala Harris at 5% to 6% in national polls, behind Warren, former Vice President Joe Biden and Sanders. He’s positioning himself as an alternative to Biden for moderate Democrats while ratcheting up his opposition to ideas from the left wing of the party.

Warren has risen in the polls while attracting college-educated white voters who are key to Buttigieg’s path to the nomination. She has dodged questions about what taxes she’d raise to finance “Medicare For All,” saying only that, “I will not sign a bill into law that does not lower costs for middle-class families.”

“The problem isn’t just how she talks about it; the problem is the multitrillion-dollar hole,” Buttigieg said Sunday on CNN’s “State of the Union.” He said that would be the case “even if you accept what she’s saying — taxes go up, premiums go down, you’ll come out ahead.”

Warren said Sunday she’s planning “over the next few weeks to put out a plan that talks about specifically the cost of Medicare for All and specifically how we pay for it.”

“Right now the cost estimates for Medicare for All vary by trillions and trillions of dollars, and the different revenue streams for how to fund it — there are a lot of,” she said at a town hall in Indianola, Iowa. “This is something I’ve been working on for months and months and it’s got just a little more work until it’s finished.”

--With assistance from Misyrlena Egkolfopoulou.

To contact the reporter on this story: Sahil Kapur in Washington at skapur39@bloomberg.net

To contact the editors responsible for this story: Wendy Benjaminson at wbenjaminson@bloomberg.net, Mark Niquette, Linus Chua

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