Posts

Why Bernie Sanders Has to Raise Taxes on the Middle Class by Daniel Bier

Willie Sutton was one of the most infamous bank robbers in American history. Over three decades, the dashing criminal robbed a hundred banks, escaped three prisons, and made off with millions. Today, he is best known for Sutton’s Law: Asked by a reporter why he robbed banks, Sutton allegedly quipped, “Because that’s where the money is.”

Sutton’s Law explains something unusual about Bernie Sander’s tax plan: it calls for massive tax hikes across the board. Why raise taxes on the middle class? Because that’s where the money is.

The problem all politicians face is that voters love to get stuff, but they hate to pay for it. The traditional solution that center-left politicians pitch is the idea that the poor and middle class will get the benefits, and the rich will pay for it.

This is approximately how things work in the United States. The top 1 percent of taxpayers earn 19 percent of total income and pay 38 percent of federal income taxes. The bottom 50 percent earn 12 percent and pay 3 percent. This chart from the Heritage Foundation shows net taxes paid and benefits received, per person, by household income group:

But Sanders’ proposals (free college, free health care, jobs programs, more Social Security, etc.) are way too heavy for the rich alone to carry, and he knows it. To his credit, his campaign has released a plan to pay for each of these myriad handouts. Vox’s Dylan Matthews has totaled up all the tax increases Sanders has proposed so far, and the picture is simply staggering.

Every household earning below $250,000 will face a tax hike of nearly 9 percent. Past that, rates explode, up to a top rate of 77 percent on incomes over $10 million.

Paying for Free

Sanders argues that most people’s average income tax rate won’t change, but this is only true if you exclude the two major taxes meant to pay for his health care program: a 2.2 percent “premium” tax and 6.2 percent payroll tax, imposed on incomes across the board. These taxes account for majority of the new revenue Sanders is counting on.

But it gets worse: his single-payer health care plan will cost 80 percent more than he claims. Analysis by the left-leaning scholar Kenneth Thorpe (who supports single payer) concludes that Sanders’ proposal will cost $1.1 trillion more each year than he claims. The trillion dollar discrepancy results from some questionable assumptions in Sanders’ numbers. For instance:

Sanders assumes $324 billion more per year in prescription drug savings than Thorpe does. Thorpe argues that this is wildly implausible.

“In 2014 private health plans paid a TOTAL of $132 billion on prescription drugs and nationally we spent $305 billion,” he writes in an email. “With their savings drug spending nationally would be negative.”

So unless pharmaceutical companies start paying you to take their drugs, the Sanders administration will need to increase taxes even more.

Analysis by the Tax Foundation finds that his proposed tax hikes already total $13.6 trillion over the next ten years. However, “the plan would [only] end up collecting $9.8 trillion over the next decade when accounting for decreased economic output.”

And the consequences will be truly devastating. Because of the taxes on labor and capital, GDP will be reduced 9.5 percent. Six million jobs will be lost. On average, after-tax incomes will be reduced by more than 18 percent.

Incomes for the bottom 50 percent will be reduced by more than 14 percent, and incomes for the top 1 percent will be reduced nearly 25 percent. Inequality warriors might cheer, but if you want to actually raise revenue, crushing the incomes of the people who pay almost 40 percent of all taxes isn’t the way to go.

These are just the effects of the $1 trillion tax hike he has planned — and he probably needs to double that to pay for single payer. Where will he find it? He’ll go where European welfare states go.

Being Like Scandinavia

Sanders is a great admirer of Scandinavian countries, such as Denmark, Sweden, and Norway, and many of his proposals are modeled on their systems. But to pay for their generous welfare benefits, they tax, and tax, and tax.

Denmark, Norway, and Sweden all capture between 20-26 percent of GDP from income and payroll taxes. By contrast, the United States collects only 15 percent.

Scandinavia’s tax rates themselves are not that much higher than the United States’. Denmark’s top rate is 30 percent higher, Sweden’s is 18 percent higher, and Norway’s is actually 16 percent lower — and yet Norway’s income tax raises 30 percent more revenue than the United States.

The answer lies in how progressive the US tax system is, in the thresholds at which people are hit by the top tax rates. The Tax Foundation explains,

Scandinavian income taxes raise a lot of revenue because they are actually rather flat. In other words, they tax most people at these high rates, not just high-income taxpayers.

The top marginal tax rate of 60 percent in Denmark applies to all income over 1.2 times the average income in Denmark. From the American perspective, this means that all income over $60,000 (1.2 times the average income of about $50,000 in the United States) would be taxed at 60 percent. …

Compare this to the United States. The top marginal tax rate of 46.8 percent (state average and federal combined rates) kicks in at 8.5 times the average U.S. income (around $400,000). Comparatively, few taxpayers in the United States face the top marginal rate.

The reason European states can pay for giant welfare programs is not because they just tax the rich more — it’s because they also scoop up a ton of middle class income. The reason why the United States can’t right now is its long-standing political arrangement to keep taxes high on the rich so they can be low on the poor and middle.

Where the Money Is – And Isn’t

As shown by the Laffer Curve, there is a point at which increasing tax rates actually reduces tax revenue, by discouraging work, hurting the economy, and encouraging tax avoidance.

Bernie’s plan already hammers the rich: households earning over $250,000 (the top 3 percent) would face marginal rates of 62-77 percent — meaning the IRS would take two-thirds to three-quarters of each additional dollar earned. His proposed capital gains taxes are so high that they are likely well past the point of positive returns. The US corporate tax rate of 40 percent is already the highest in the world, and even Sanders hasn’t proposed increasing it.

The only way to solve his revenue problem is to raise rates on the middle and upper-middle classes, or flatten the structure to make the top rates start kicking in much lower. You can see why a “progressive” isn’t keen on making more regressive taxes part of his platform, but the money has to come from somewhere.

The bottom fifty percent don’t pay much income tax now (only $34 billion), but they also don’t earn enough to fill the gap. Making their taxes proportionate to income would only raise $107 billion, without even considering how the higher rates would reduce employment and income.

The top 5 percent are pretty well wrung dry by Sanders’ plan, and their incomes are going to be reduced by 20-25 percent anyway. It’s hard to imagine that there’s much more blood to be had from that stone.

But households between the 50th and the 95th percentile (incomes between $37,000 to $180,000 a year) earn about 54 percent of total income — a share would likely go up, given the larger income reductions expected for top earners. Currently, this group pays only 38 percent of total income taxes, and, despite the 9 percent tax hike, they’re comparatively spared by the original tax plan. Their incomes are now the lowest hanging fruit on the tax tree.

As they go to the polls this year, the middle class should remember Sutton’s Law.

Daniel Bier

Daniel Bier

Daniel Bier is the editor of Anything Peaceful. He writes on issues relating to science, civil liberties, and economic freedom.

Bolshevic Bernie Sanders beats Hillary Clinton 42-4 among Texas Gamers

SAN ANTONIO, Texas /PRNewswire-USNewswire/ — NAVGTR CORP. — Young voters turned out in droves to support Bernie Sanders in San Antonio.  A mock Iowa caucus was held at the Penny Arcade Expo South (PAXS), a gaming festival drawing tens of thousands.

The caucus event was titled, “Decision 2016: Vote on Game ‘War of Awards’ or Donald Trump,” organized by the National Academy of Video Game Trade Reviewers (NAVGTR) for the Official PAXS panel schedule.

A 450-seat room was packed with 332 caucus-goers, clearly dominated by Democratic voters with only 24 self-declared Republican voters.  “All night there was a clear enthusiasm gap between those who were willing to climb over people in their rows of seats and those who chose to sit and watch impartially,” said academy president Thomas Allen.  “The plan was to clear half the room of chairs to have a large open space, but time was working against us.”

Among the caucus-goers, about 73 people voted publicly for the presidential candidates.  Forty-two Bernie Sanders supporters flooded the voting floor, while four and three people stood for Hillary Clinton and Martin O’Malley, respectively.

Among Republicans, Ted Cruz won with 8 votes.  Rand Paul was a close second with 7 votes.  Marco Rubio held in the top three with 5 votes.  Jeb Bush received two votes.  Mike Huckabee and Donald Trump received 1 vote each.

Game players also expressed who they thought should win the industry D.I.C.E. and Game Developers Choice Awards.  The crowd established fan-favorite front-runners such as “The Witcher 3: Wild Hunt” for Achievement in Character (DICE), “Metal Gear Solid V: The Phantom Pain” for Game Design (GDC), “Undertale” for Innovation (GDC), and “Ori and the Blind Forest” developer Moon Studios for Best Debut (GDC).

In the final vote, “Fallout 4” won Game of the Year with an estimated 32 votes.  Even among gamers, supporters were therefore more able to consolidate top-tier votes behind Bernie Sanders than any one video game:

Presenters included Larry Asberry Jr., Vanessa Fernandez, Colby Sites, Justen Andrews, Geoff Mendicino, and George Wood.

The National Academy of Video Game Trade Reviewers announces its own nominations February 9.  Entries have been extended to a February 1 deadline.  NAVGTR will caucus again at South by Southwest (SXSW) and the International Game Developers Association (IGDA) Networking Event on March 15, 2016.  Subscribe at navgtr.org for updates.

RELATED ARTICLE: The Four Types of Socialists

Bloomberg for President?

Amid reports that the FBI is close to recommending that the Department of Justice (DOJ) prosecute Hillary Clinton for mishandling classified materials, and that FBI Director James Comey and other agency personnel investigating Clinton may resign if the DOJ refuses to do so, sources close to Michael Bloomberg say the billionaire former mayor of New York City may run for president if Clinton appears unable to win the Democratic Party’s nomination.

CBS New York reports, “[t]hey say Bloomberg would strongly consider running if the general election looked like it would be a contest between Democrat Bernie Sanders and Republicans Donald Trump or Ted Cruz.” Bloomberg, who has let on that he would be willing to spend 1 billion dollars on a campaign, is expected to make his decision by March. Four states are holding their presidential primaries and caucuses in February, and another 14 will do so on Super Tuesday, March 1st.

Appearing unfazed by her troubles, Clinton insists “nothing that I did was wrong” and said of the Bloomberg news, “the way I read what he said was if I didn’t get the nomination, he might consider it. Well, I’m going to relieve him of that and get the nomination, so he doesn’t have to.”

Unfortunately, from Clinton’s perspective, that may be a fairly big “if.” Polls show her being trounced by Sen. Bernie Sanders in New Hampshire and also losing Iowa, where the country’s first presidential primaries and caucuses will be held, and that her national figures are dropping. Other polls show that more Americans view her unfavorably than favorably.

Fox News reports, “[t]he FBI investigation into Hillary Clinton’s use of private email as secretary of state has expanded to look at whether the possible ‘intersection’ of Clinton Foundation work and State Department business may have violated public corruption laws.” Fox followed up on the story on Tuesday, saying, “The security investigation is now part and parcel with the criminal [public corruption] investigation.”

Bloomberg must theorize that he could appeal to voters on the basis of his success as a businessman and his time as the mayor of the nation’s most populous city. But he faces a difficult “if” of his own. Clinton been casting herself as the most anti-gun presidential candidate in American history, a distinction Bloomberg would certainly want to challenge if he threw his hat into the ring. Also, and perhaps for the same reason, a Morning Consult poll released this week found Bloomberg at 13% in a hypothetical three-way race against Donald Trump and Clinton, 11% when the Republican candidate is Sen. Ted Cruz, and down to 10% when the Republican is Sen. Marco Rubio.

Bloomberg might be able to bump those numbers up among Democrats a bit, if he promised to pardon Clinton on the first day of his presidency. That would not only endear him to Clinton’s most fanatical supporters, it would wipe the slate clean, at least legally-speaking, for someone who shares his deep antipathy for guns. With public opinion trending steadily against gun control, a President Bloomberg couldn’t afford to have one of his strongest anti-gun allies in court or in prison.

American Exceptionalism: The Defining Question for Presidential Candidates

The most important question we can ask our presidential candidates in this rapidly approaching primary season is for their definition of American Exceptionalism. After six-plus years of an administration that has apologized for America, demoralized our American military, destroyed our status on the international stage, attacked America’s unparalleled entrepreneurial vigor, and assaulted our future path to prosperity, I’ve had enough. My daughters deserve better, your children deserve better, and the many men and women who sacrificed and died for the ideas our flag represents deserve better.

We are an exceptional nation, and Americans are an exceptional people, and we should never make any apologies for that. We are not only the economic breadbasket of the world, and the innovative idea factory of the world, but we are a beacon of freedom for other nations to follow. Yes, we’ve fallen short at times, but we’ve always gotten back up and emerged stronger.

We were born of a revolution where the odds of being victorious were incalculable. We conquered the scourge of slavery. We sent our fighting men and women to foreign shores to conquer fascism and communism. And we measure our national valor not by the conquered land we’ve acquired, but by the land we’ve returned to people we’ve set free from the shackles of tyranny in exchange for the blood of our sons and daughters. Our commitment to liberty and freedom as gifted by God, not man, is unique and has no equal on the world stage either now, or historically. Reagan recognized this, JFK recognized this, our military men and women recognize this and, most importantly, the overwhelming majority of Americans recognize this.

It’s time for an American renaissance. We’ve been through the economic travails and the international Barack Obama American apology tour and it’s time for an American president who will boldly stand, both at home and abroad, for a reinvigorated and vibrant American spirit, which shines brightly on the global stage. Our next president must passionately fight back against the idea that the United States of America can happily enter into an era of “managed decline.” I will be no part of any “managed decline” and our next President should reaffirm that an exceptional America will never decline, managed or otherwise, in this lifetime or in the lifetimes of the American sons and daughters to follow.

While I’ll be intensely focused on all of the candidate’s responses to questions on taxes, spending and the other important issues of our time, it’s their answers as to what makes America exceptional that will tell me if they can right America’s course. I ask you to join me in this mission to challenge our candidates for president, and everywhere else at the state and local levels, and to ask our future leaders what makes America exceptional. It’s not a gotcha question and I’m not looking for a candidate who can wax poetic in their response. I am looking for a candidate who can firmly, passionately and vigorously defend the axiom that this nation has been touched by the hand of God and has no equal, and that it’s not who we’ve been willing to fight with that has made us exceptional, but what we have been willing to fight for.

EDITORS NOTE: This column originally appeared in the Conservative Review. The featured image of Rick Santorum is by Tom Williams | AP Photo.

Oklahoma beheadings: An Independent Investigation of Local Mosques Needed

I am not a gambler, but I would take odds with anyone about the outcome of the beheading in Oklahoma City, OK. I mean about the motive for the murder of an innocent woman in the name of Islam by Alton Alexander Nolen (a.k.a. Jah’Keem Yisrael) that the FBI is investigating.

finch2

James Finch, FBI Special Agent in Charge (SA), Oklahoma City.

James E. Finch, FBI Special Agent in Charge (SA), Oklahoma City office, will conclude the beheading had nothing to do with Islam and Sharia law. It will be labeled another workplace violence incident.

Why would Finch do this?

The FBI is no longer a politically independent agency conducting neutral investigations. The FBI is now a political machine working under the watchful eyes of outgoing Attorney General Eric Holder and President Barack Obama. The FBI conclusions on any national level, and media hyped, cases will be driven by the political agenda of Obama and Holder.

A first grader could call this case correctly. SA Finch, according to his resume, has the background to call it as he sees it. But will he? When any federal agent or investigative agency is no longer neutral and working for the best interest of a community or the country, they have become null and void.

The FBI has approximately 35,000 personnel, 13,000 federal agents, and a budget from U.S. taxpayers of over $8 billion annually. Perhaps it is time that the FBI be reduced in size, and the money saved be provided to local and state investigative agencies?

America no longer needs another political acronym (like the IRS and DOJ) fraudulently using tax dollars to further any political agenda.

The murder committed by Nolen may have been sparked by his firing, but the manner in which he carried it out, and most importantly the reason he turned into an Islamic terrorist is because of the Islamic ideology in it’s purest form. Islamic terrorists commit all types of violent acts in the name of Islam.

The mosques in Oklahoma City, OK, will never be adequately investigated by federal authorities. President Obama and Attorney General Holder have made it very clear that terrorism ‘never’ generates from a mosque or anything Islamic.

I have conducted firsthand counter-terrorism research in over 275 mosques in America. Over 75% of the mosques have very violent materials inside their facilities and the other 25% are very effective in hiding what they teach their worshipers.

If a Muslim practices peace in America, they are not being taught peace in the Islamic Centers and mosques. Murderers like Nolen do not have to use the internet, travel to Syria, or study under violent terrorists, they simply have to go to any one of the 2,300 mosques located throughout America (of which there are four listed in Oklahoma City).

I firmly believe that a professional independent research project for the Oklahoma City mosques is needed. My team and I can spend three days in the area and provide an accurate picture of what exactly is being taught. The results of our research will be provided to the American public, local and state authorities.

If you have the means to donate please do. If not I fully understand. Our economy and national security are at it’s lowest level since we became America.

RELATED VIDEO: Details From Beheader’s Oklahoma Mosque. An interview with Noor, who attended the same mosque as did Alton Nolen.

RELATED ARTICLES:

Analyzing the Oklahoma Beheading Crime Scene

Pentagon Official: The President Is Lying To America — About Us, And About ISIS

Why America Won’t Have Enough Money to Battle ISIS

FL Middle school quiz asks – “What Kind Of Party Animal Are You?”

Dr. Fran Adams, Superintendent of Indian River County School District

“I was contacted tonight by a group of parents wanting answers. This quiz (survey) below was given to Ms. [Megan] Kendrick’s 7th grade Pre-AP Civics class last week at Storm Grove Middle School in Indian River County,” writes Laura Zorc, SE FL State Coordinator for Florida Parents Against Common Core (FPACC).

The What Kind of Party Animal Are You? quiz states: “Take this quiz to get a sense of which party, the Republican or the Democrat, is the better fit for you. Remember, you do not have to pick a party – you may remain Independent. You may also change your party.”

Question #1: “I would support a government increase of my taxes if the money were used to pay for expanded health and social programs.”

Question #2: “I think the government should impose stricter limits on access to guns.”

Question #3: “I believe organized prayer should be kept out of schools. Having students pray is a violation of the First Amendment to the U.S. Constitution.”

Question #4: “I would support drilling for oil in a wildlife refuge to help reduce America’s dependence on foreign oil.”

Question #5: “I believe that looking out for U.S. interests abroad must come first, even if that means the U.S. takes action without the approval of the United Nations or our allies.”

Question #6: “I believe if you have nothing to hide, theres no reason to worry about government surveillance. It would not bother me if my government listened in on my personal phone calls as long as the surveillance was helping to catch terrorists.”

Question #7: “I believe the government should relax regulations on immigration and find a way for law-abiding illegal immigrants to stay in the U.S. legally and pay taxes.”

NOTE: The answer choices for each question are – Agree (one point), Not Sure (two points), Disagree (three points).

According to Jennifer Idlette-Williams, Principal of Storm Grove Middle School, “The survey What Kind of Party Animal Are You? came from page 14 of the Junior Scholastic Magazine, which is a state approved resource for Florida’s mandatory Civics state curriculum. All three of the Civics teachers at Storm Grove use the survey, and other Indian River middle schools have used it. No grades were attached to the survey and no names were linked to the survey. There was no parental opt out for taking the survey as it is part of the state approved curricula.” Principal Idette-Williams noted, “Students could create their own political party animal. One student created a frog, which can live in the water or on land. This student would be comfortable with both parties.”

What kind of a party animal are you

Quiz used in Civics class. For a larger view click on the image.

According to Zorc, “The students were told that they could not take this Quiz/Survey home, they had to complete [it] at school. One student felt that they must consult with ‘his or her’ parent and did not feel comfortable filling it out. In other words the student had to ‘smuggle it out’ as described to me. (NOTE: Child is afraid of getting in trouble and we will can not disclose identity of child)”

Zorc states, “After you read this quiz/survey, as a parent you will be appalled by material being taught. Parents are outraged at the way the questions are presented.” See teacher’s weekly agenda to notice that this assignment is Common Core State Standards aligned.

“Parents want an explanation to why a ‘civics’ (a study of the theoretical practical aspects of citizenship, its rights and duties…) curriculum aligned to Common Core State Standards is being taught? The FL DOE had been emphatic that CCSS is only going to be taught in English Language Arts and Math only. Secondly, parents want to know ‘who’ approved this curriculum material being taught?” asks Zorc. According to the school principal the FLDOE approved the use of this material.

Parents, concerned citizens and members of FPACC plan to attend the September 24th Indian River County School Board meeting to ask that this material be removed from the public school district curriculum.

EDITORS NOTE: WDW – FL has calls into the school district and school board requesting information including who authorized the use of this quiz, what other schools have used it and how is the data from the quiz used. We are awaiting a reply and will post an update.