The headline blares: "Hillary Clinton's presidential campaign blasts Bernie Sanders' policies, says they would raise middle-class taxes". The article says ... Bernie Sanders proposal includes a 2.2 percent across the board income tax and a 6.7 percent payroll tax for employers.
The article cites another article at the Washington Post which says Hillary Clinton, for the first time in this campaign, is now committing to the same pledge Obama made: no new taxes on households earning under $250,000 a year.
Clinton campaign spokesman Brian Fallon praised what he called Hillary Clinton's "bold, aggressive agenda" and contended that the former Secretary of State "believes strongly that middle-class families deserve a raise, not a tax increase."
A few points I'd like to make:
- For one thing, $250,000 a year is not a "middle-class" wage — per Social Security wage data, that's in the top 1%. Do they deserve a raise too?
- A 2.2% across-the-board tax pays for "Medicare for All" — and therefore, eliminates the mandate to purchase an Obamcare healthcare plan.
- Upper income earners will pay proportionately higher taxes, so that lower income earners will get the same quality healthcare.
- Besides just healthcare, lower income earners will also get paid family and medical leave (which is not automatically included in Obamacare)
The WaPo article goes on to explain:
To offset his spending plans, [Senator Bernie] Sanders has detailed a batch of tax increases mainly targeted at corporations and the highest income earners. Those include new taxes on financial transactions such as stock trades and on income that corporations are sheltering in tax savings overseas, ending a preferential tax treatment that benefits hedge fund managers, boosting estate taxes and eliminating the cap on income subject to payroll taxation for earners who make more than $250,000 a year.
In an economic projection for Bernie Sanders single-payer healthcare plan (Medicare for All) by the University of Massachusetts economist Gerald Friedman, he estimated that the plan would raise overall income for 95 percent of Americans, after accounting for tax changes and lower health costs. Friedman concludes:
This analysis shows that it is possible to reform the U.S. health financing system to make it more efficient and equitable. Universal health care with comprehensive benefits could be achieved under a single-payer system as embodied in HR 676. Improved Medicare for All would cost less for 95% of households and reduce the deficit by $154 billion in the first year.
Besides his proposal of a financial transaction tax to help pay for college tuitions, Bernie Sanders also proposes lifting the $118,500 "cap" on Social Security to expand the program. Hillary Clinton won't. See my post: Bernie Sanders vs. Hillary Clinton on Social Security.
Currently, Social Security is financed by a 12.4 percent tax on wage and salary income up to $118,500. The program could be made permanently solvent by raising this tax by two percentage points, or by keeping the tax rate the same and abolishing the cap. But raising the tax hurts the low earners, and abolishing the $118,500 cap acts like a large tax increase on high earners.
It should be noted that 95% of all wage earners make LESS than $118,500 a year — and pays this tax on 100% of their earnings.
Also consider this: Most people in the 0.01% get all their income from capital gains and pays NO Social Security tax at all on this income. So, should we worry or feel sorry for all those "poor rich people" (who Clinton defines as "middle-class") who might get a slight tax increase?
And Bernie Sanders also has a sensible tax plan for corporations:
"We’re not going to give huge tax breaks anymore to large corporations who are putting their profits in the Cayman Islands and in Bermuda and not paying a nickel in federal taxes. We’re going to use that tax money to rebuild our crumbling infrastructure and create up to 13 million good paying jobs."
The Sanders campaign pointed to a study by Citizens for Tax Justice, showing 12 major corporations had paid effective tax rates of less than zero over a five year period while maintaining subsidiaries in tax havens. Also see: The Sorry State of Corporate Taxes: What Fortune 500 firms pay (or don’t pay) in the USA, and what they pay abroad — 2008 to 2012.
Bernie Sanders has been highlighting this important issue that has spawned bipartisan concern — the growing practice of U.S. multinational corporations avoiding or reducing U.S. taxes by keeping profits overseas in low-tax havens. One recent study, by Reed College economics professor Kimberly Clausing, estimates that the growing practice has led to revenue losses of between $77 billion and $111 billion as of 2012.
A recent letter signed by 24 international tax experts, led by Edward Kleinbard, the former chief of staff of the Joint Committee on Taxation, noted that corporate profits as a share of GDP [gross domestic product] — at 9.8 percent — are nearly at all-time highs. Their U.S. taxes as a share of GDP are just 2 percent, which are near all-time lows.
The Sanders campaign also cited a Joint Committee on Taxation estimate for his bill called the Corporate Tax Dodging Prevention Act, which would raise more than $113 billion over the next decade, as well as an $900 billion estimate in the tax lawyer’s letter for the cost of the tax expenditure that allows U.S. corporations to defer paying U.S. tax on their foreign earnings until that income is repatriated.
Bernie Sanders says this clawed-back revenue can be used on infrastructure spending that will create as many as 13 million jobs. This is derived from a White House Council of Economic Advisers estimate.
Hillary Clinton lives in a corporate (banking) bubble with all her super-wealthy friends and doesn't know what working people earn or what they really need. As Bernie said: She talks the talk but doesn't walk the walk. If she walked in our shoes, she would know that 50% of all wage earners take home $28,000 a year OR LESS. That's a far cry from $250,000 that she and Obama thinks is "middle-class".
Hillary Clinton has promised not to raise taxes on the middle-class — but she is attempting to make false comparisons with Bernie Sanders, who has supported lifting the Social Security "cap" for people with incomes of $118,500 a year (in the top 5% income bracket) to $250,000 a year (in the top 1% income bracket). Someone should tell Hillary: $250,000 a year is NOT "middle-class" — and that the "median wage" is $24,000 a year. Bernie Sanders has a bill pending in Congress (that would mandate employers provide paid family leave time after a child is born) that would be funded by an increase in payroll taxes. Clinton has also spoken out forcefully for the concept of paid family leave, but has not embraced the particular measure because it violates a campaign pledge not to raise taxes on families making less than $250,000. But Bernie's plan is estimated to cost the average worker about $1.39 week. (That's a heck-of-a-lot cheaper than a babysitter or day-care center!) Clinton has said she is "willing to consider" an idea (but has not committed to) scrapping the income cap for Social Security taxes, as REAL progressive activists advocate.