Presidential candidate Sen. Bernie Sanders’ (I., Vt.) proposed tax plan would raise taxes by $13.6 trillion over the next decade and reduce the economy’s size by 9.5 percent, according to an analysis by the Tax Foundation.
While on the campaign trail, the senator has proposed $18 trillion in spending over the next decade. His plan includes $15 trillion for a government-run single-payer health care plan and trillions more for Social Security, roads and bridges, higher education, paid family and medical leave, and private pension funds, to name just a few.
Sanders’ proposed tax plan will increase marginal tax rates and the cost of capital, a move that will significantly reduce GDP, lower wages, and eliminate jobs.
According to the Tax Foundation, Sanders aims most of his tax provisions at high-income households, creating four new income tax brackets with rates of 37 percent, 43 percent, 48 percent, and 52 percent. Additionally, Sanders would tax capital gains and dividends for households with income over $250,000 and create a 2.2 percent income-based health care premium.
However, as Sanders has admitted, his plan also includes tax increases on the middle class. “We will raise taxes. Yes, we will,” Sanders said at the CNN town hall last weekend.
“A majority of the revenue raised by 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,” the analysis explains.
According to a recent report from the Congressional Budget Office, even without Sanders’ tax plan the nation’s economy is projected to expand at a rate much lower than in recent decades. Sanders’ plan would lower the growth rate further, as its proposed marginal tax rate increases on labor and capital would reduce GDP by 9.5 percent in the long term.
“At the center of my campaign is how we’re going to raise wages,” Sanders said at the first Democratic debate. “Yes, of course, raise the minimum wage, but we have to do so much more, including finding ways so that companies share profits with the workers who helped to make them. And then we have to figure out how we’re going to make the tax system a fairer one.”
“And in my view what we need to do is create millions of jobs by rebuilding our crumbling infrastructure; raise the minimum wage to $15 an hour; pay equity for women workers; and our disastrous trade policies, which have cost us millions of jobs; and make every public college and university in this country tuition-free,” he said.
After accounting for reductions in economic growth, Sanders’ plan would lead to 12.84 percent lower after-tax incomes for all taxpayers, 6 million fewer full-time jobs, and an 18.6 percent smaller capital stock.
“Both Bernie Sanders and Hillary Clinton have proposed tax plans that will usher in a new era of even bigger government,” said James Hewitt, a Republican National Committee spokesman. “The fact that Hillary Clinton is still trying to run to the left of a candidate who is proposing a $13 trillion tax increase shows just how far to the left the Democrat Party has gone.”
The Sanders campaign did not respond to requests for comment by press time.