The fiscal effects are even more pronounced over the long run. We estimate that federal spending on the public option would exceed total military spending by 2042 and match combined spending on Medicaid, the Children’s Health Insurance Program and ACA subsidies by 2049. In the latter year the public option would become the third most expensive government program, behind only Medicare and Social Security. The public option alone would raise the federal debt by 30% of gross domestic product over the next 30 years.

While some, like Mr. Biden, claim their health reforms can be paid for by simply taxing the wealthy more, that seems unrealistic. We conclude that if tax increases to pay for a politically realistic public option were limited to high-income filers, the top marginal rate would have to rise from the current 37% to 73% in 2049—a level not seen since the 1960s. Such large rate increases would undoubtedly have economic effects, causing revenue to fall short of our static estimates.

If policy makers want to avoid a large increase in deficits, then, a public option would require tax hikes on most Americans, including middle-income families. An across-the-board income-tax hike to support this policy would mean that taxpayers in the 28% and 33% tax brackets would see their marginal tax rates increase by about six percentage points by 2049, while the top tax bracket would rise above 47%.