There isn’t enough wealth in America for Bernie’s Plans.
After the Super Tuesday votes were tallied, the Democratic party may have just made the smartest and most strategic move ever. Before South Carolina voted Saturday, frontrunner Vermont Senator Bernie Sanders seemed all but assured of the nomination. But former Vice President Joe Biden’s Carolina firewall held and Tuesday night was a Biden clean sweep of all but the leftists of states, even convincing Mike Bloomberg this morning that he would rather not waste another half a billion dollars.
What the Democratic establishment realized was a simple truth. Most of America is not ready to embrace Sanders’ platform of socialism. And whether they realized it or not, America could not afford a President Sanders.
It is often easy to get behind someone who runs a campaign for the little guy, the forgotten, the disadvantaged and marginalized. The “champion” of such noble purposes creates a ‘movement’, not just a campaign, centered around taking down the unfair and unequal ultra-wealthy and the bad corporations who do not pay their fair share.
Young voters hear the promises of free healthcare as a right, free four-year college education, and forgiveness of their student loan debt which has become a massive burden, and they are ready to fight for the cause. And like all the others throughout history before him, Bernie has made these plans sound fair by explaining that the wealthy and the greedy corporations will bear the costs of this ‘free’ expansion of government provided and government run programs.
But what are the costs, really? During a recent interview on 60 Minutes, Senator Sanders was specifically asked by Anderson Cooper if he knew what the price tag was for all his proposals together and he responded, “No, I don’t…. Well, I can’t – you know, I can’t rattle off to you every nickel and every dime.”
A revolutionist candidate proposing to move to a single payor medical system, cancelling the existence of private health insurance completely (affecting over 180 million Americans), proposing to massively increase the corporate tax rate (along with his plan to increase taxes even more based on the wage differences between the corporate CEO and the lowest paid worker), along with the nationalization of public college and universities through taxpayer funded education – and he doesn’t know the total cost of his plans?
Well several analyses have been performed and all conclude approximately the same… Sanders’ plan will cost America an additional $50 Trillion in just the next 10 years alone (Yahoo Finance estimates $4.9 trillion per year, the Washington Post says $5.46 trillion per year, and the Progressive Policy Institute reports $5.3 trillion per year).
Sanders says that the wealthy and corporations will pay more to cover his programs, but is there enough wealth in America to afford $50 trillion in additional spending every 10 years? No! According to the Brookings Institute, total net worth (total assets minus total liabilities) of all Americans was just $98 Trillion in 2018.
When assessing income, in 2016, the top 1% of Americans, 1.4 million taxpayers, earned over a combined $10.2 trillion before taxes. They paid more taxes than the bottom 90% of earners combined – paying 37.3% of all federal taxes versus 30.5% paid by the bottom 90% of the entire country.
In 2019, the federal government spent $4.45 trillion. Adding the cost of Bernie’s programs, an additional $5 trillion per year, and we have a projected budget of $9.45 trillion, or 92.6% of what the top 1% of Americans earned.
US corporate net income (after current taxes) was just over $2 trillion in 2018. This means that adding the net corporate income to the incomes of the top 1% of Americans, and you have a total income pool of $12.25 trillion against a budget of $9.45 trillion or 77% of total taxable income from the evil corporations and top 1 percenters.
But, like the exodus of the wealthy out of France due to their wealth tax (since canceled) and Apple moving their international headquarters from Ireland to the Channel Island of Jersey to avoid the EU/Irish tax crackdown, when you tax the job creators at anything approaching these levels, they will simply leave America. Obstructive tax policies never deliver the tons of new tax revenue projected, as people and corporations always adjust where and how they earn money. This ultimately leads to a total government takeover of industries, resulting in an overall downward decline in the quality provided to the masses of such industries – just ask the Canadians why they come to America for medical treatment – a country just over 10% the size of our population.
Throughout history, overzealous tax policy/seizures on corporations and the wealthy has always led to the failure of those regimes who promised to make everything fair and equal for those left behind. And really, it is simply a matter of common sense… when you take away the financial incentive a person or a business has to earn money… they won’t.
*This blog post was featured on the front page of Fox Business! You can find the article below:
https://www.foxbusiness.com/politics/sanders-super-tuesday-democrats-socialism
Rebecca Walser
Rebecca Walser earned her juris doctor degree from the University of Florida and her Master of Law degree in taxation from New York University. She is a frequent national media contributor.
Rebecca Walser is a tax attorney, a certified financial planner, and the author of Wealth Unbroken, who specializes in the strategic planning of maximizing lifetime wealth while minimizing tax through her practice, Walser Wealth Management.
