I have to admit I started reading Nihan Krishan’s article for the Washington Examiner, titled “Sanders plan would have billionaires taxed more than they earn”, with a great deal of skepticism. Even bug-eyed Bernie, I reasoned, isn’t nutty enough to try establishing a tax base over 100%.
But now that I’ve read it, I’m not so sure.
Here is how it begins:
Bernie Sanders’ tax plan would impose annual tax rates of well over 100% on the richest 400 Americans, according to his economic advisers, mostly through his new wealth tax.
The idea that the federal government should take more from the very wealthy than they earn in a year is a policy innovation, one the Democratic candidate has advanced as part of a sweeping anti-inequality platform. Critics, however, argue that it’s unrealistic and would harm the economy by reversing billionaires’ incentives to innovate and invest.
Emmanuel Saez and Gabriel Zucman, the Berkeley economists who’ve advised Sanders on his wealth tax plan and the authors of a new book on inequality, calculate on their website that Sanders’ tax proposals would result in a 97.5% tax rate for the richest 400 Americans, who have pre-tax incomes above $456.5 million — and that rate would rise above 100%, depending on how the specifics of Sanders’ plan were spelled out. Today, in contrast, the tax rate for the same group is 23.1%, they estimate.
If this is accurate – and it does seem to be – I would like to offer my congratulations to Bernie Sanders and his people. Why? Because the idea is so looney-tunes that even a leftist like Ben Ritz, from the Progressive Policy Institute says “The idea that someone like Jeff Bezos is going to pay 97% or more of their income in taxes is on its face ridiculous.”
But, hey, this is Bernie. So what can you say? I mean, how many other politicians have the
insanity, er, courage to tell you they intend to completely disincentivize the people likely create businesses and employ workers?
Look at it this way: suppose you are handed a tax model that says “Thinking about expanding your businesses or creating new ones? Well, if you fail, tough luck; you’re out the money. But if you succeed? We’ll take every cent and then send you a bill for the rest.” How fast will you go forward? Not very, I think.
But, then again, there is another side to consider. Bernie can trot out his latest big-name supporter, Alexandria Ocasio-Cortez, to tell detractors that a 100%+ tax rate won’t really hurt that bad, because, the world is going to end in less than 12 years anyway.
Yep, that should put their concerns to rest….