There is a powerful appeal to the promise of government-provided health care and other social programs without premiums, deductibles, or copays. But there are questions that politicians promoting Democratic socialism rarely answer, specifically, what will it actually cost and how will we pay for it? If we want to understand what these promises mean for middle-income families, we need to look beyond the sales pitch and examine the numbers.
Abdul El-Sayed, Michigan senator-elect, recently said of universal health care: “it is guaranteed health insurance from cradle to the moment you pass away. It comes without premiums or co-pay for deductions. It guarantees you care when you need it. This is a level of security we have never known in the United States.”
Any country that has adopted some version of national health care proves it does not work as the advocates promise. In fact, it is paid for through substantial taxes, requires some fees and co-pays, and means long waits for many of the medical procedures.
What would Democratic socialists’ programs cost and how would they be paid for? Advocates will argue that taxing the rich can pay for these programs. However, studies have repeatedly shown that the additional revenue from taxing high-income earners would fall far short of covering the costs. Even substantially higher taxes on the wealthy cannot close a funding gap of this magnitude, leaving middle- and lower-income taxpayers to shoulder much of the burden.
The U.S. is not paying for the programs it already has. For fiscal year 2026, federal spending was $7.4 trillion and revenue was $5.4 trillion, leaving a deficit of $2 trillion. To pay for our current expenses solely through increased revenue would require an increase of approximately 37 percent in taxes; doing so solely through spending cuts would require roughly a 27 percent decrease in spending. Adding the Democratic socialist programs would add a minimum of $8 trillion annually to spending, according to a Cato Institute study, and require a 166 percent increase in overall taxes to pay for all of the current and new programs.
Sweden as an Example of High Taxes
Sweden provides a useful example. Its government provides Swedes with universal healthcare, “free” college tuition, various forms of child support, and much more. To fund these many programs, Sweden’s tax structure includes a 32 percent tax on employers on wages, a minimum income tax rate of approximately 32 percent, and a rate of 52 percent on income above $62,000. In addition, Sweden has a value-added tax (VAT) that averages 19 percent on consumption, along with gasoline taxes that are approximately $2.70 per gallon higher than those in the United States. These taxes are essential to fund the programs that politicians often hold up as “free.”
As an example, for a typical Swedish middle-income employee whose gross income, including employer paid taxes on his behalf, totals $70,000 a year, an employer pays approximately $17,000 in pension and other taxes (the employee “take home” gross income is $53,000 and the 32 percent is based on that). The employee pays about $17,000 in income taxes on wages. The value-added tax (VAT) would add approximately $6,500, along with another $1,350 in gasoline taxes compared with what Americans pay. That brings the total tax to $41,850.
How It Would Work in the U.S.
For the same employee in the United States, Social Security taxes would be about $8,000, Medicare taxes about $1,800 (both are split evenly between the employer and employee), and medical insurance, assuming the employer provides it, approximately $8,000. Income taxes on wages would add about $3,500, and state sales taxes would add another $3,900. That brings the total to $25,200.
Based on this comparison, if we wanted the same programs Sweden offers, we would need a tax structure that raises comparable revenue, and that would mean paying an additional $16,650 in taxes (paid for by both employer and employee, but the employer’s costs reduce the employee’s salary).
Economies grow fastest and the standard of living improves much more rapidly when the government is limited, and taxes cover the cost of government. Adding these many “free” programs will cause government to increase dramatically and will slow our growth remarkably. This is a fact that is proven repeatedly in the real world — not a theory.
Knowing the Consequences
There is nothing inherently wrong with choosing a different model of government, as Sweden has done. But that choice comes with real financial consequences, and middle-income families deserve to know the financial implications for them and the economy. Then they can make an intelligent choice.
Before embracing the promise of Democratic socialism, voters should ask if these benefits are worth the additional cost, and if they are prepared to pay for them. That is a decision Americans should make with their eyes open, not based on empty promises that gloss over the important facts about cost and how to pay for them.
Remember, there is no free lunch, so quit looking for it.
