Bernie Sanders, the Democratic presidential hopeful and Vermont senator, has proposed a $15 trillion tax increase for all Americans, including the middle class and the poor, according to a new report issued by the Tax Policy Center.
Those who earn over $142,00 would experience an average tax hike of $44,759, while the poorest Americans would see taxes increase by $165. Citizens who fall into the second tier of incomes — between $23,000 and $45,000 — would pay $1,625 more, per Politico.
It is, however, the top 0.1 percent who will pay more than $3 million in additional taxes and see a 50 percent income loss.
— Urban Institute (@urbaninstitute) March 4, 2016
All the proposal’s details fall in line with Sanders stance on income equality, which starkly differs from Hillary Clinton’s. While both have proposed tax increases, Hillary’s proposal would only increase taxes by $1 trillion and would target the wealthy and businesses, while others would actually experience a tax cut.
Len Burman, who heads the non-partisan Tax Policy Center, explained the differences between Sanders and Clinton, according to Politico.
“There is a very, very clear choice. They really couldn’t be more different. Bernie Sanders is very open about raising taxes on everybody, with the argument that people at all income levels are going to be benefiting from the new spending programs that he’s proposing.”
A distinct contrast is that Sanders is being open and honest about a plan, which would be implemented from 2017 through 2025, which will benefit many.
— Richard Rubin (@RichardRubinDC) March 4, 2016
Highlights from “An Analysis of Senator Bernie Sander’s Tax Proposals” are below:
Individual income tax – Regular income taxes would be capped at 28 percent of taxable income, but surtaxes would be based on adjusted gross income for wealthier households. Taxpayers with AGI over $200,000 would pay a surtax (married couples filing together $250,000 and $125,000, for married filing separately.)
Estate and gift taxes – The 2009 exemption levels on estate taxes would be restored. The 40 percent current rate would be replaced with 45 percent for an estate valued between $3.5 million and $10 million ($7 million for married couples). A surtax of 10 percent would be added for estates valued over $500 million ($1 billion for married couples). Additionally, the annual exclusion from the gift tax would be severely limited.
Payroll taxes – Bernie Sanders would also enact a 6.2 percent payroll tax on employers. The Social Security payroll tax (combined employee-employer rate of 12.4 percent) would be extended. A new 0.2 percent payroll tax will be paid by employees and employers on the same tax base as the SS payroll tax.
Business taxes – Foreign companies that are managed by the U.S. would be treated as U.S. corporations. Additional proposals by Sanders include imposing a limitation on the foreign tax credit per country and eliminating tax breaks for energy companies (gas, oil, and coal).
Excise taxes – A new tax on financial transactions would be enacted with the following rates: 1) 0.500 percent on stock trades; 2) 0.100 percent on bonds; and 3) 0.005 on derivatives (other underlying sources.)
Affordable Care Act taxes – The surtax would be increased by 6.2 percent, and penalties in the ACA that are phased out due to taxes on high-cost employers plans will be repealed.
The money from the tax hikes that Sanders would like to phase in would be used to pay for new government programs, such as universal health care, free college, paid family and medical leave, added Politico. Per Burman, a benefit versus cost analysis was not determined by the TPC, although it appears that most Americans could benefit.
“We do not account for the effects of the new government programs on income. We focused on the tax side, and we’re not really experts on the spending component.”
What can be deduced is that Bernie Sanders’ belief system and vision for America vastly differs from Hillary Clinton’s and, without a doubt, the Republican candidates.
[Photo by Scott Olson/Getty]