According to the Tax Policy Center and the Tax Foundation, the Sanders tax plan will raise taxes on most Americans.
“It’s a very, very, very big tax increase for everyone except those at the bottom,” Roberton Williams, a fellow at the Urban-Brookings Tax Policy Center, said in January.
A Tax Policy Center analysis of the Sanders tax scheme released on January 28 estimates payroll taxes and individual income taxes will not only increase on wealthy Americans, it will lead to 10.56% lower after-tax income for all taxpayers and a 17.91% lower after-tax income for the wealthiest Americans. Additionally, the plan will result in 9.5 percent lower GDP over the long term.
The bottom 50 percent of taxpayers will see their after-tax incomes decrease by at least 4.87 percent. The top 50 percent of taxpayers will see their after-tax incomes decrease by at least 8.57 percent and the top 1 percent of taxpayers will see their after-tax incomes fall by 17.91 percent, according to the report.
“When accounting for reduced GDP, after-tax incomes of all taxpayers would fall by at least 12.84 percent,” Alan Cole and Scott Greenberg write.
A reduction in GDP will translate into an 18.6 percent smaller capital stock and 6.0 million fewer full-time equivalent jobs.
The following chart breaks down the tax plan:
Data compiled by the Tax Policy Center estimates 45.3 percent of American households—approximately 77.5 million—will pay no federal individual income tax. This is due to the fact they have no taxable income. Around half receive enough tax breaks to nullify their tax liability.
Sanders’ rhetoric routinely targets Wall Street and billionaires. However, according to the center, the top 1 percent of taxpayers pay a higher effective income tax rate than any other group, about 23%.
“On average, those in the bottom 40 percent of the income spectrum end up getting money from the government. Meanwhile, the richest 20 percent of Americans, by far, pay the most in income taxes, forking over nearly 87 percent of all the income tax collected by Uncle Sam,” writes Catey Hill forMarket Watch.
The Sanders plan will raise additional tax revenue by eliminating employer-paid health insurance. This will lead to employers raising wages and salaries which will then be subject to income and payroll taxes, causing federal tax revenues to increase by $3.6 trillion over the next decade.
The Foundation for Economic Education invokes Sutton’s law when looking at the Sanders tax plan.
Willie Sutton was an infamous bank robber. “Asked by a reporter why he robbed banks, Sutton allegedly quipped, ‘Because that’s where the money is.’”
Sutton’s Law explains something unusual about Bernie Sander’s tax plan: it calls for massive tax hikes across the board. Why raise taxes on the middle class? Because that’s where the money is.
The problem all politicians face is that voters love to get stuff, but they hate to pay for it. The traditional solution that center-left politicians pitch is the idea that the poor and middle class will get the benefits, and the rich will pay for it.
As the above analysis demonstrates, this will not be the case—all but the poor and the so-called lower middle class will see their tax burden increased.
Sanders will accelerate the 40-year decline of the American middle class. Despite the fact Americans are working longer hours for lower wages median family income is almost $5,000 less than it was in 1999.
Back in 2014 Michael Snyder of the Economic Collapse blog rattled off a list demonstrating how the middle class is being systematically destroyed.
“According to a study recently discussed in the New York Times, the ‘typical American household’ is now worth 36 percent less than it was worth a decade ago,” writes Snyder, and more than half of all working Americans make less than $30,000 a year in wages.
“If you can believe it, Americans received more than 2 trillion dollars in benefits from the federal government last year alone,” he adds.
Bernie will hike that amount exponentially.
The question is—where will the money come from after the middle class and the millionaires have been looted and the mega-rich flee the country?