Finally America gets to hear from real voters instead of us knuckle headed pundits. One hopes that those Hawkeyes were paying attention to what the Tax Foundation, the umpire of all things tax policy, recently announced.
Sen. Sanders’s tax plan would have the effect of shrinking the economy, and my (and, more to the point, your) paycheck by 10%. It’s already a scrape to get by. I really, really, don’t want a 10% pay cut. Do you?
Winston Churchill said in a speech in the House of Commons on October 22, 1945: “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.”
Therein lies a problem and perhaps an intractable one for Democratic Socialist Sanders’s presidential aspirations. Socialism, even Democratic Socialism, by and large, and with some notable exceptions, has proven a recipe for misery.
Trigger Warning for my Conservative readers: I love Bernie Sanders.
Microaggression Alert for my Progressive readers: I won’t vote for him for president.
First things first. How do I love thee, Sen. Sanders? Let me count the ways!
You have authentic, deep, empathy for working people. I am a working people. Sanders is addressing, front and center, the economic distress, and chronic anxiety, that many of us, myself very much included, feel. Bravo!
In an earlier column I wrote whimsically, and as an intended compliment, that Sanders is the Winnie-The-Pooh of the 2016 presidential election cycle. In Winnie the Pooh, A.A. Milne introduced his eponymous hero by saying:
Winnie-the-Pooh lived in a forest all by himself under the name of Sanders.
“What does ‘under the name’ mean?” asked Christopher Robin.
“It means he had the name over the door in gold letters, and lived under it….”
To belabor the metaphor one supposes that Hillary Clinton embodies the officious earnestness of the lovable Rabbit. Martin O’Malley? The adorably enthusiastic Tigger, perhaps?
So my love derives mostly from the fact that Sanders has his eye on the “It’s the economy, Stupid!” ball and far more than virtually any other candidate of either party. What's not to love?
So why wouldn’t I vote for him? It boils down to the fact that when it comes to miseries, even shared equally, call me Eeyore.
Yes, yes, Dear Commenters! I understand that Bernie calls himself a “Democratic Socialist” and that this is distinct from full 200 proof Hugo Chavez Socialism. For my right-of-center readers, The Daily Beast’s Michael Tomasky recently, elegantly, parsed the differences in his You Damn Millennials Don’t Get Socialism :
Since no one’s talking about the state seizing the means of production today, what’s the remaining difference, you might ask? Fair question. These days, with socialists having dropped the core thing that made socialism socialism, it’s probably mostly a mindset, an emotional-psychological sense of how confrontational and disruptive and anti-establishment people want their leaders to be. The only distinctly socialist (as opposed to liberal) thing about Sanders’s platform is his call for Medicare-for-all….
I for one find “the unequal sharing of blessings” — provided the game isn’t rigged (which, currently, it is, but to my mind that calls for mending, not ending, it) — greatly preferable to the “equal sharing of miseries.” Thus I find the Tax Foundation’s assessment of Sen. Sanders’s tax plan alarming.
The Tax Foundation analyzes the effect of proposed tax plans, both statically and dynamically. It performed this service for Jeb Bush , Ben Carson, Hillary Clinton , Ted Cruz , Rand Paul , Marco Rubio , Rick Santorum and Donald Trump . Now it has looked into the plan of Bernie Sanders .
The most alarming findings as to Sen. Sanders? It “would lead to 9.5 percent lower GDP over the long term. On a static basis, the plan would lead to 10.56 percent lower after-tax income for all taxpayers.” In greater depth:
- Senator Sanders (I-VT) would enact a number of policies that would raise payroll taxes and individual income taxes, especially on high-income households.
- Senator Sanders’s plan would raise tax revenue by $13.6 trillion over the next decade on a static basis. However, the plan would end up collecting $9.8 trillion over the next decade when accounting for decreased economic output in the long run.
- A majority of the revenue raised by the Sanders plan would come from a new 6.2 percent employer-side payroll tax, a new 2.2 percent broad-based income tax, and the elimination of tax expenditures relating to healthcare.
- According to the Tax Foundation’s Taxes and Growth Model, the plan would significantly increase marginal tax rates and the cost of capital, which would lead to 9.5 percent lower GDP over the long term.
- On a static basis, the plan would lead to 10.56 percent lower after-tax income for all taxpayers and 17.91 percent lower after-tax income for the top 1 percent. When accounting for reduced GDP, after-tax incomes of all taxpayers would fall by at least 12.84 percent.
Contrast this to the prospect of 14% economic growth (and a 9% tax cut for individuals) under, by its analysis, the Ted Cruz tax plan. We see a projected American economy (and paychecks!) almost 25% smaller under Sanders than under Cruz. Cutting my pay (and, more to the point, your pay) by 25% … even stretching it out over ten years … strikes me as evidencing very little brain.
Are there real problems with federal policy, problems that have caused 15 years of economic stagnation? You bet there are. Do these problems cry out to be addressed? You bet they do! (I have expended trillions of pixels here pointing out opportunities to restore equitable prosperity.)
That said, does ten future years of shrinking the pie appear a palatable solution to 15 past years of low growth? Out of the frying pan into the fire. Whiskey Tango Foxtrot.
The left tends to disdain the Tax Foundation as a center-right institute. Fair enough. That said, stop just dissing the ump. The Tax Foundation lays out with great specificity how it makes its calculus.
For those who challenge, it's not very persuasive just to kick dirt on the ump. Progressives? Sharpen your pencils. Let’s see what you’ve got. If all you have is vituperation save it for The Daily Kos.
There are two, equal, pieces to the American Dream. One is prosperity. The other is fairness.
As that great supply-side president John F. Kennedy once said, “Life is unfair.” He also said “A rising tide lifts all boats.” With the implementation of his tax rate cut all boats rose. By a lot.
Love you Bernie! I love your commitment to fairness for working people like me. That said fairness, while necessary, is not sufficient.
I think I can speak for many, both left and right, when I say that we wish a fair, or at least fairer, sharing of blessings rather than a more equal sharing of miseries. It behooves Sen. Sanders to offer ways to grow, not shrink, the economic pie while offering fairer shares. That's the American Dream.
Originating at Forbes.com