Prepare to see the size of your paycheck shrink in 2017 if Bernie Sanders is elected President of the United States.
A new analysis of the Democratic presidential candidate's tax plan found that the self-professed socialist would raise federal tax revenue by 34% and cut the after-tax incomes of the wealthiest households in the U.S. in half — all to fund his big-government proposals like universal healthcare and free college tuition.
The Tax Policy Center, which conducted the analysis, found that under a Sanders' administration:
- The total amount of federal taxes collected would increase by $15.3 trillion over the next decade;
- The top 0.1% of earners would be taxed an average federal rate of 63.7% in 2017 - up from 34.2% in 2016; and
- The middle 20% of American households would see their taxes go up $4,692 in 2017 - resulting in a net loss of 8.5% of their after-tax income.
Leonard Burman, the Tax Policy Center's director and a former Treasury Department official under President Bill Clinton, told The Wall Street Journal:
“Sanders is clearly betting that people are willing to pay for his expansive new welfare state. There’s a giant tax increase, mostly on the rich, but everyone would pay more.”
Warren Gunnels, the director of policy for Sanders' presidential campaign, issued a scathing attack on the Center's analysis Friday evening.
He wrote, in part:
"[T]he Tax Policy Center chose to analyze Sanders’ tax plan in a vacuum without taking into account the savings the American people would gain under his Medicare-for-all plan. That is misleading.
Not only did the Tax Policy Center fail to estimate the savings the American people will gain under Medicare-for-all, they also fail to count the economic gains that would be achieved by Sanders’ plan to rebuild the middle class. ...
The reality is that Sanders’ plans will make our tax system more progressive and will make the investments that are key to our future prosperity.”
The Tax Policy Center has now conducted analysis of the tax plans for five of the six remaining 2016 presidential candidates, using a bipartisan panel of reviewers to examine the plans.
Here's what they found in a nutshell, courtesy of Mother Jones:
While the WSJ notes that the economists tasked with reviewing the tax plans of the various candidates running for president are "generally skeptical" that the tax changes can prompt major economic responses, those on the Tax Policy Center's panel did not feel this way about Sanders' proposal, writing:
“The proposed tax changes on both labor and capital income are very large compared with any tax policy changes since World War II, so the empirical evidence of relatively small effects cited earlier may not apply.
The lack of prior historical experience for changes of this magnitude makes the macroeconomic effects of Sanders’s plan especially uncertain, but there is a risk that the very large tax increases could significantly weaken the U.S. economy.”
Whether or not Sanders has the opportunity to enact his drastic tax proposals on the American public next year remains to be seen, however.
Former Secretary of State Hillary Clinton has a substantial lead over Sanders in the current delegate count. She has also gained significant ground over him nationally in two recent polls, and is ahead in several states set to vote in the next two weeks — including delegate-rich Florida, Ohio and Michigan.