This story is from ABC News.
Sanders is perhaps best known in political life for his efforts to champion the middle class, saying that in order to bridge the widening wealth and income inequality gap in America, the country needs a revamped tax policy that forces Wall Street, big corporations, millionaires and billionaires –like Trump – to pay up – and doesn’t impose further taxes on the middle and working class.
However, when pressed by Stephanopoulos about whether the proposed Senate tax legislation he backs, which would use a payroll tax to fund a mandate for 12 weeks of paid family and medical leave from all U.S. employers, Sander confirmed that the bill would require taxing all citizens -– not just the top 1 percent.
“[The payroll tax] would hit everyone –- yeah, it would. But it would mean we would join the rest of the industrialized world and make sure that when a mom has a baby she can in fact stay home with that baby for three months, rather than going back to work at the end of one week,” Sanders said.
What most Democrats (all?) don’t understand, is that when you tax the rich, the costs filter down to consumers and employees. If a company is making a 5% profit (and Wal-mart makes a 3% profit), then slapping even a 5% tax increase on them will cause layoffs, outsourcing and other repercussions. We have a serious problem in this country with economic illiteracy – a widespread lack of familiarity with how the private sector works, and how jobs are created. For one thing, the public thinks that the average profit margin of companies is over 32%, when it fact it is much lower.
So the real question is, how much does Bernie Sanders want to spend, and pass on to “the rich”? Because if it’s more than a 1% or 2% increase in corporate taxes, we are all – all of us – going to feel the burn. And it’s not going to a slight increase to our payroll taxes, it’s going to be a huge number of people losing their jobs, and the prices of consumer goods and services rising to pay for the new taxes.
How much does all this Bernie Sanders spending cost?
The Wall Street Journal – which knows something about business and economics – has done an analysis of how much the socialist agenda of Bernie Sanders will cost. The final price tag? $18 trillion dollars!
Sen. Bernie Sanders, whose liberal call to action has propelled his long-shot presidential campaign, is proposing an array of new programs that would amount to the largest peacetime expansion of government in modern American history.
In all, he backs at least $18 trillion in new spending over a decade, according to a tally by The Wall Street Journal, a sum that alarms conservatives and gives even many Democrats pause. Mr. Sanders sees the money as going to essential government services at a time of increasing strain on the middle class.
[…]To pay for it, Mr. Sanders, a Vermont independent running for the Democratic nomination, has so far detailed tax increases that could bring in as much as $6.5 trillion over 10 years, according to his staff.
A campaign aide said additional tax proposals would be offered to offset the cost of some, and possibly all, of his health program. A Democratic proposal for such a “single-payer” health plan, now in Congress, would be funded in part through a new payroll tax on employers and workers, with the trade-off being that employers would no longer have to pay for or arrange their workers’ insurance.
Investors Business Daily has more to say about Sanders’ proposals:
His “Medicare for All” single-payer health plan alone would cost roughly $15 trillion over a decade.
He wants the government to provide “universal” child care and pre-kindergarten programs, along with free tuition at any public college, and proposes spending an additional $1 trillion on infrastructure and expanding Social Security by $1.2 trillion. Add up just these and a few other items on Sanders’ list, and price tag tops $18 trillion over a decade.
[…]And this doesn’t count the massive costs of mandates and regulations Sanders wants to impose on businesses, such as a $15 minimum wage, plus mandatory paid medical leave, vacations and sick days.
He’d also make it far easier for unions to organize.
Keep in mind that when Obama became president, the national debt was about $8 trillion. Now it’s $18.5 trillion, thanks to the Democrats. And if Bernie Sanders is elected, it will go to over $36.5 trillion. This is what Bernie Sanders expects to solve by “taxing the rich”. And Hillary Clinton expects to get the money for her spending from “taxing the wealthy”, as she said in the CNN debate. Do the rich have enough money lying around for the Democrats to confiscate?
Can we pay for it by “taxing the rich”?
A while back, the libertarian Cato Institute had an article talking about who would pay for Obama’s $1 trillion health care plan. They asked whether Obama could pay for it by “taxing the rich”.
The answer is no:
Funding the new health-care plan on the backs of households making $200,000 or more per year would require permanently increasing their annual total tax payments by about 50 percent. So, for example, a household that currently pays $50,000 in federal income taxes would need to pay another $25,000. Remember, however, that Social Security and Medicare already face enormous shortfalls. Shoring up these programs — another Obama campaign promise — would require collecting 328 percent more tax revenue from the rich. No, we didn’t forget a decimal point: That is three hundred and twenty-eight percent.
And what follows from taxing the rich?
[…]A major tax increase causes the tax capacity of the rich to shrink gradually as two factors kick in. First, many of the households falling into Obama’s “rich” definition are married couples in which both partners are working professionals. When tax rates rise, the lower-earning spouses in these couples tend to work less. Often, they quit work entirely. Second, many of the “rich” are budding entrepreneurs and small-business owners. They finance their operations using their own after-tax income, or with after-tax resources from family and friends. Small-business innovation is the fuel for long-term economic growth. In fact, many of the largest companies in the United States today were either small or nonexistent just 25 years ago. Killing small business kills the American economy.
The rich in France abandoned France in droves when the socialist Francois Hollande passed a 75% top income tax rate. Why do Democrat voters think that this would not happen here? We have to learn economics by watching what happens after the policies are enacted, in other times and places. Higher taxes on the rich cause them to produce less, lowering tax revenues.
I myself have been planning to stop working within the next 5 years, exactly because I can see that the Democrat voters are taking us in the direction of massive taxes on employment. I don’t intend to be working when that happens. If enough people respond to higher tax rates like me, the Democrats are going to have an even bigger problem paying for their spending promises.