A new Quinnipiac Poll shows Bernie Sanders leads Trump, 53% to 39%. Will America elect a socialist as president in 2020? But he is not alone. Elizabeth Warren and Bernie Sanders are two peas in a pod when it comes to “Progressive” policies. So let’s not pick on Sanders. The rest of the Democratic candidates all tout similar views. News Forecasters asks, how realistic are these policies or are they just a scam to get votes?
In what I call a rare bit of honesty from the left-leaning journalists at Axios, Axios triggered News Forecasters by clearly point out Sanders policies in a nice bullet form. The article was entitled, “Bernie Sanders’ plan to restructure your life” – and that he would if elected and could get his agenda in place. We copied and pasted Sanders’ policies from the Axios article and post them here again for you:
- Your energy choices: His Green New Deal would spend $16 trillion to force you to stop using the energy mostly used today — oil, gas and nuclear. He promises cleaner power and air in return.
- Your house and car: The Sanders government would pay to weatherize homes and small businesses, and to upgrade gas-powered cars for electric ones. He would mandate the end of conventional gas car manufacturing in a decade.
- Your health insurance: He would eliminate private insurance and put you on a government plan more generous than Medicare. No more copays, deductibles or premiums, too.
- Your current student debt: He would eliminate it for everyone.
- Your kids’ college: Everyone gets free tuition at public universities, community colleges, trade schools, and apprenticeship programs, too.
- Your teachers: He will hire more teachers, pay them more, and fund better school supplies.
- Your job: He promises full employment.
- Your wage: He would guarantee you at least $15 per hour.
- Your rich friends: They’ll be paying for much of this with a fat tax increase.
- Your own taxes: Sanders has been vague on this one. But the total cost of just the programs listed above is $20 trillion-plus at the lowest possible end over a decade, excluding Medicare for All, which experts say could be at least double. News Forecasters adds: $20 trillion, (this is very much on the low side of many other estimates at $40 trillion – so lets split the difference) the total. So a total of $50 trillion over 10 years or $5 trillion additional spending per year.
Wow, what a nice impressive and desirable list. Who couldn’t be for all that? Except for that last bullet point, just who is going to pay for all this? Let’s dig a little deeper and see just how realistic this is.
Just what is the current annual federal budget in the U.S.? The budget office estimated the federal government budget would spend $4.2 trillion in fiscal 2018. How much do we collect in tax for Federal U.S. taxes? Collected in federal tax revenues in fiscal 2018, total tax collections equaled $3.3 trillion, according to the Treasury statement. This means we spend $1 trillion (the annual deficit) more than we tax.
But as implied by Bernie Sanders we can just get the evil rich “1%” to pay for it – right? Perhaps we can dip even a little lower into the top “10%” of earners right? Here is a general breakdown of what each of these groups earns and pays taxes on:
|Income Group||Earnings level||Earnings as a % of total earners||Tax rate||Taxes as a % of total taxpayers|
As a footnote, the bottom “50%” of taxpayers (incomes below $39,275) earned 11.28% of total income. This group of taxpayers paid approximately $41 billion in taxes or 2.83% of all income taxes – not even worth counting. So the income group between “50%” to “90%” pay the bulk of the remaining 30% in taxes.
We would need to tax nearly $6 trillion in tax to get the shortfalls (additional Progressive agenda costs and the budget deficit). There have been many articles suggesting taxing only the “1%,” but this would be insufficient to make up the tax shortfall – we would need to dip lower in the economic class strata. Let’s assume all else being the same.
Simple math would say if we approximately just tripled, yes I said triple, everyone’s taxes it could be done. We could graduate the tax a little more, but the tax system is already heavily graduated (see footnote). If you are in the bottom “50%” of earners, your taxes would go up to only 8.49%. A bargain really when looking at the services you would receive – if you are in this class and are offered this, take it, don’t fight for further graduation of tax rates.
Hang on a minute. The person in the “10%” economic strata earning $118,400, after this tripling taxes scheme, nets a take-home of only about $43,660. The person in the bottom “50%” economic strata earning $39,275 nets about a take-home of $35,685. Yes, socialism has arrived – a “true” plan to restructure your life. Does that $8,000 more make you motivated to work harder and strive for better? You know the answer to this. This is the problem when you take away the merit-based economic system.
This does not even address the issue of a negative feedback loop of lower productivity and lower tax generation – we may have to even increase the tax rates further to account for this. The other point as well is that it creates a huge black market and fraud to escape the high taxes – but no worries here, we can always hire more government IRS employees to account for this.
All this being said, there are issues with the global economic model and wealth inequality – as discussed here. If something is not done, for sure we could see revolution eventually coming – the Progressive form of politics proposed by Bernie Sanders is just the first shot. Nearly 40% of Americans now prefer this economic model, as cited in a recent poll (and growing). Whatever would get implemented would be something far less – better to propose a mountain and take a hill approach. However, News Forecasters believes more socialism is coming – it will be built on a piecemeal basis.
News Forecasters asked early if this is a socialist scam? It simply depends on your political persuasion. Like any good politician, Bernie Sanders touts the upsides and little of the downsides. As the Axios article said when speaking of paying for the Progressive agenda, Bernie Sanders is “vague on this one.”
A video presentation of this subject: