Democratic 2016 hopeful Sen. Bernie Sanders’s tax plan would result in Americans losing an average of 12.4% of their after-tax income in 2017, according to a study released by the Tax Policy Center (TPC) Friday.
The Vermont senator’s proposal includes historically high numbers, changing the top marginal tax rate – as capital gains is treated as income – from 36.5% to a whopping 64.2%, with the top .01% seeing an average tax increase of nearly $3.1 million next year.
While the wealthiest Americans would be hit hardest, every bracket would see a significant hike, according to the report by the nonpartisan Washington, D.C.-based think tank.
Middle-class households would lose an average of $4,700, or 8.5%, of their after-tax income, while the lowest bracket would get a $165 jump in 2017.
All taxpayers would face a new 2.2% tax on income and the cap would be lifted on the 6.2% Social Security payroll tax in income over $250,000. A new 6.2% payroll tax paid by employers would also be enacted.
A financial transaction tax would be put in place with rates of .5% on stock trades, 0.1% on bonds and 0.005% on derivatives.
The estate tax would be increased using graduated rates – 45% for estates worth $3.5 million or $7 million for couples, 50% for those valued between $10 million and $50 million, 55% for those over the $50 million threshold. A new additional 10% surtax would be imposed on any estate over $500 million or $1 billion for couples.
Taxes would also be put in place to promote green energy.
The hikes would include “a new tax on ‘carbon polluting substances,’ starting at $15 per ton of carbon dioxide or of carbon dioxide–equivalent content, phasing up to $73 per ton in 2035 and then rising by 5% plus the inflation rate in subsequent years,” the report said.
Like Hillary Clinton’s proposal, Sanders floated multiple options to prevent U.S. companies merging with corporations abroad to take advantage of lower corporate tax rates.
“Such measures include (1) ending deferral of federal income taxes on profits of foreign subsidiaries, (2) imposing a per country limit on foreign tax credits to end cross-crediting, (3) limiting corporate inversions, and (4) preventing earnings stripping” the report said.
TPC estimates the plan would generate $15.3 trillion over the course of the next decade and an additional $25.1 trillion in the 10 subsequent years – enough to pay off the publicly held debt by 2036. But the self-described Democratic Socialist has other plans, the revenue raised would go toward his costly Medicare-for-all plan, which would cost $1.38 trillion annually, and free tuition at public universities.
“The plan is unlikely to do much, if anything, to reverse the currently unsustainable path for public debt,” the report said. “Moreover, there is a risk that spending might outstrip the significant new revenues and exacerbate the nation’s long-term financial imbalance.”
Several left-leaning economists have come out against Sanders’s proposals, going as far as saying his plan for the economy is all “puppies and rainbows.”
This report, by Juliegrace Brufke, was cross-posted by arrangement with the Daily Caller News Foundation.