Debunk This by Matt Palumbo

If you’ve been paying attention to the left-wing populism of Bernie Sanders and Elizabeth Warren, you know they want you to believe that there’s no social program America  cannot afford. We only need to do one thing – tax the millionaires and billionaires!

Who knew it was so simple? Hopefully nobody, because it isn’t.

It wasn’t Warren’s first time dodging a question over middle class tax increases when during the most recent CNN Democratic debate she was asked “You have not specified how you’re going to pay for the most expensive plan, Medicare for All. Will you raise taxes on the middle class to pay for it? Yes or no?” That question came after Warren had just said that taxes will only go up for “the wealthy, for corporations” and will “go down for middle-class families.”

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Bernie Sanders at least attempted to give a “yes-but” answer to the question, stating that “…it is appropriate to acknowledge that taxes will go up. They’re going to go up significantly for the wealthy. And for virtually everybody, the tax increase they pay will be substantially less — substantially less than what they were paying for premiums and out-of-pocket expansions.” How does he expect the government to design a tax that taxes households almost exactly what they previously paid in insurance premiums – and how he does he expect anyone’s tax burden to go down when taxpayers would now be paying for not only their own healthcare plans through their taxes, but at least twenty-million more individuals that Sanders would cover?

Sanders also fails to take quality into account. Even if everyone were somehow paying the same amount through taxes instead of premiums, its no secret that government run health programs lag significantly behind private plans in quality. And lastly, it’s not like Medicare for all is the only expensive social program that Democrats are advocating for, all of which will require tax increases. The idea that they’ll somehow be able to pass such programs in a “tax neutral” scenario is pure delusion.

Back to the main point – the issue of middle class taxes is one that Democrats are afraid to touch, with some blasting CNN for daring even consider it an issue.

NYU journalism professor Jay Rosen thought that questions over taxing the middle class should be a “credibility killer” – because apparently those individuals composing the backbone of our economy don’t deserve to know if their taxes are going up?

The Huffington Post’s Lydia Polgreen dismissed questions over middle class taxes as “lazy, gotcha questions,” because god-forbid anyone ask how something will be paid for. Then again, this is the party of “we have to pass the bill to find out what’s in it.” Now it’s “we have to pass the bill so you can find out how much it’ll cost you.”

 

If Sanders and Warren were proposing policies that would reduce middle class taxes, do you think these same leftists would be complaining? Of course not. It’s only when the reality of their policies becomes apparently that they’re playing damage control.

The mishmash of Santa Claus policies that Warren and Sanders have assembled closely resembles the portfolio of programs currently present in the Scandinavian countries, and Sanders has even said as much when he tries to pretend that Venezuela isn’t real socialism. “When I talk about democratic socialism, I’m not looking at Venezuela. I’m not looking at Cuba. I’m looking at countries like Denmark and Sweden” he said elsewhere.

And what do those programs require from the middle class? So much that it’s not surprise Warren and some liberal pundits would rather us not talk about it. As I noted in my essay “The High Cost of Scandinavian Socialism“:

The large welfare states of Scandinavia are not without their cost.  In 2017, all three countries (Sweden, Denmark, and Norway) had levels of taxation exceeding half of every dollar earned. Taxes as a percent of GDP are:

  • 50.7%  in Sweden
  • 53.5%  in Denmark
  • 54.7% in Norway

For reference, in the U.S. taxes at all levels of government averaged 26% of GDP in 2016 (and have since been cut).

High income taxes also kick in at far lower levels in Scandinavia. In Sweden, for instance, the lowest tax burden (applied to the first Kronor of income) is 32%.

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In America, an earner isn’t subject to the top tax bracket of 37% until they earn over $500,000. While an American would need to earn eight times the average income to be subject to our top tax bracket, the figures are only 1.5 times average income in Sweden, 1.6 in Norway, and 1.3 in Denmark (source: pages 30-31).

If the U.S. tax code was as flat as Denmark’s, someone earning roughly $70,000 would face a top marginal tax rate of 46.3% (source: page 30).

Bear in mind that these taxes represent only the first main layer of taxation in Scandinavia, as all three countries have national sales taxes (VAT) of 25% on top of that.

So on that note, I guess it’s little surprise that anyone on the left wants to talk about policies that will require minimum wage workers to fork over nearly half of their income.

Indeed the rich would see their taxes rise under a Sanders or Warren presidency – but so would the middle class – and the poor.