How can we fund universal childcare, Medicare for All, and a green economy while reducing inequality? A new plan shows how taxing wealth and corporate profits more fairly—and cutting wasteful spending—could pay for a fairer, more prosperous economy.
Here's a question progressives get asked constantly: Fine, you want universal childcare, Medicare for All, and a green economy—but how are you going to pay for it? As part of the Game Changers project described in a previous post, economists Gerald Epstein and Aaron Medlin just answered it with a full accounting. They price out the 30 policies in the Game Changers initiative and show, line by line, how to fund them without adding a dime to the deficit—by taxing wealth and capital the same way the United States already taxes wages, and by shrinking a military and immigration-enforcement budget that is both bloated and destructive. The burden of the increased taxes they propose would fall most heavily on those in the upper reaches of the top 1%.
Let’s start with the scale of inequality that these 30 policy proposals are responding to. The top 1% of American households hold about a third of the nation's wealth and roughly half of the stock market. In income terms, that same 1% takes home twice as much as the entire bottom half of the country combined. The effects ripple outward: stagnant demand drags down growth, upward mobility stalls, and a small elite ends up with political influence wildly out of proportion to its numbers. Meanwhile, ordinary families get squeezed from both sides—wages haven't kept pace with productivity, and housing, health care, and childcare keep getting more expensive. At the same time, advances in AI threaten to make even stable jobs feel precarious.
Epstein and Medlin’s sharper point is that this isn't just about how wealth is distributed—it's about how the government pays its bills. The way Washington currently finances itself is a driver of inequality. Labor income gets taxed heavily and reliably; wealth and capital income get taxed lightly and unevenly. Whatever isn’t collected gets borrowed instead—mostly from the same wealthy households who weren't taxed for it, who then collect interest on the loan, year after year. It’s a system that manufactures inequality twice: once by under-taxing fortunes, and then again by paying those fortunes interest on the resulting debt.
The numbers back this up. Between 2018 and 2020, the 400 richest Americans paid an average tax rate of about 24% on their pre-tax income—lower than what the bottom 50% of income earners pay on average, and far below the 45% top labor-income earners pay. Since two-thirds of federal bonds, which the government issues to borrow money, are held by private investors, interest payments flow disproportionately to people who are already wealthy. The result: the 400 richest Americans held about $300 billion (in today's dollars) in 1982; by 2025 that amount had grown more than twentyfold, to $6.6 trillion. Republican administrations from Reagan through both Trump terms accelerated federal government borrowing with tax cuts skewed to the top. Most recently, the 2025 One Big Beautiful Bill Act, which the Congressional Budget Office projects will cut federal revenue by trillions and widen the deficit by roughly $3–4 trillion through 2034, will hand the richest 1% over $50,000 a year in tax cuts. Meanwhile, revenue from the corporate income tax, which taxes corporate profits, has collapsed from 7% of gross domestic product (GDP) in 1944 to about 1% in 2019. As Warren Buffett famously put it, an economy where his receptionist pays a higher tax rate than he does “does not strike me as a just economy.”
The authors are careful to note that deficits aren’t inherently bad—borrowing to fund productive investment (such as education, infrastructure, and most of the Game Changers agenda) pays for itself over time because the social return exceeds the cost. The danger is borrowing to fund waste: excess military spending, fossil-fuel subsidies, and corporate giveaways. That kind of borrowing doesn’t just fail to pay off—it deepens inequality and, if debt costs ever outrun economic growth, can become self-reinforcing.
So, what's the fix? The Game Changers policies are split into three funding categories. Many need no new government money at all—things like stronger labor protections, national rent control, fairer trade rules, or a four-day workweek, which change laws and norms rather than spend cash. A second group has dedicated funding mechanisms tied to the programs themselves: polluters fund climate resilience and a fossil-fuel phase-down; scaled premiums fund paid family leave, disaster insurance, and long-term care. Medicare for All, the single biggest item, mostly falls into this category too—it eliminates private insurance premiums, leaving most Americans paying less overall and only the wealthiest paying more.
A third group of policies—universal childcare, a child allowance, social housing, plus a small residual slice of Medicare for All—requires general tax revenue. That’s the piece this brief is really about, and the plan pays for it two ways.
First, spending gets reallocated by cutting military spending deemed unnecessary for genuine defense and shrinking ICE’s budget in favor of a more humane immigrant-integration system. Together, these reallocations free up between $208 billion and $413 billion a year.
Second, a new revenue package targets the income that goes untaxed or is under-taxed by the current tax code: capital gains, corporate profits, inherited fortunes, and speculative trading, rather than paychecks. Concretely, that means restoring the corporate tax rate from the current rate of 21% to 35% (its pre-2017 level, falling mostly on roughly 350 highly profitable firms); raising the corporate minimum tax from 15% to 21% of taxable profits; quadrupling the stock buyback tax (charging corporations when they repurchase their own stock) from 1% to 4%; funding serious IRS enforcement against wealthy tax avoidance; adding a small financial-transactions tax on trades of stocks, bonds, and other securities; creating a minimum income tax on total income for households worth over $100 million; and eliminating the loophole that lets inherited wealth escape capital gains tax entirely when it changes hands at death.
Crucially, wages are taxed in a progressive way, with households earning less than $20,000 paying no wage taxes at all, and even households earning as much as $200,000 paying less overall once lower health costs, the child allowance, and federally funded childcare are taken into account. The bulk of the tax burden would land at the top.
Yes, with room to spare. Subtracting the military and ICE savings from the cost of programs that require general funding, the needed funds come to between $557.3 billion and $614.3 billion. The revenue package raises between $701.8 billion and $1.425 trillion, exceeding the general-revenue requirement by approximately $87.5 billion to $868 billion.
Epstein and Medlin are careful to call this one workable combination among many, not the only path—and they note their estimates are conservative, since many Game Changers policies (healthier kids, cheaper health care, fewer financial crises, and avoided climate damage) would likely pay for themselves in ways the brief doesn’t even count. Their larger argument is that funding a fairer economy and shrinking inequality aren't competing goals requiring trade-offs. They’re the same project, since concentrated wealth left untaxed doesn’t just distort the budget: it buys the political power to keep itself that way.
Nancy Folbre is a professor emerita of economics at the University of Massachusetts Amherst. Her research explores the interface between political economy and feminist theory.
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