It’s Not Just the Rich Who Would Be Hit by Sanders’ Tax Hikes
Policy + Politics

It’s Not Just the Rich Who Would Be Hit by Sanders’ Tax Hikes


Sen. Bernie Sanders of Vermont has repeatedly vowed to soak the rich with higher taxes to finance his cornucopia of proposals for helping the middle class, including free state college tuition for all, expanded Social Security benefits and a major surge in highway and bridge construction to create new jobs.

The self-styled Democratic Socialist and chief rival to Hillary Rodham Clinton for the Democratic presidential nomination says he would finance trillions of dollars worth of government programs by raising taxes on the wealthiest one percent of Americans, increasing the inheritance tax, slapping a transactions tax on Wall Street investors, closing generous loopholes and tapping into overseas corporate tax havens.

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As he pointed out again on Sunday in an appearance on ABC News This Week, a “massive redistribution of wealth” over the past three decades has “unfortunately gone in the wrong direction, from the middle class and working families to Donald Trump and his friends, the top one-tenth of one percent.”

“And yes, let me be very clear,” he said. “If we are going to make public colleges and universities tuition free, as I believe we have to do in the 21st Century, then yeah, we are going to have a tax on Wall Street speculation and yes we’re going to ask Trump and his billionaire friends to pay more in taxes.”

So it was a little jarring to hear Sanders say that one of the tax proposals he has in mind to finance a key spending measure would hit not only wealthy Americans but also middle class wage earners and even working poor families who live just above the poverty line.

That’s because Sanders’ $319 billion proposal for providing paid family and medical leave would be financed by a small increase in the federal  Social Security and Medicare FICA  payroll tax that all working Americans must pay.

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Sanders is modeling his plan to provide paid family and medical leave – including maternity and paternity leave – after legislation reintroduced in March by Sen. Kirsten Gillibrand (D-NY). That plan would be financed by raising the current 6.2 percent FICA tax rate for both employees and employers by two-tenths of one percent.  

The additional payroll tax revenue would be automatically deducted from paychecks and funneled through an independent trust fund established within the Social Security Administration. The payroll tax applies to annual incomes of up to $118,500 and proportionately hits lower income wage earners harder than higher income Americans.

Pressed by ABC’s George Stephanopoulos on whether this would contradict his pledge to only hit the highest income Americans with new taxes, Sanders replied, “I didn’t say that.”

“If you’re looking at providing paid family and medical leave – which virtually every other major country has – so that when a mom gives birth, she doesn’t have to go back to work in two weeks or if there is an illness in the family, dad or mom can stay home with the kids, that will require a small increase in the payroll tax.”

The proposal would make leaves available to every individual for up to 60 workdays or 12 weeks regardless of the size of their employer. Under current law, companies with more than 50 employees must provide 12 weeks of unpaid leave for new parents, but there is no requirement to provide paid leave.

Only an estimated 13 percent of workers in the U.S. can obtain paid family leave through their employers and just 37 percent of workers have access to personal paid medical leave that their employers provide through temporary disability insurance, according to Gillibrand’s office.

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So far, Sanders’ calls for major income redistribution and $18 trillion or more of new programs over the coming decade have played well among liberal audiences and have helped to catapult him into a strong second place behind Clinton, the former secretary of state.  

While Clinton has mildly chided Sanders for tailoring his proposals to those of socialistic countries – and noted  during last week’s Democratic presidential debate that “We are not Denmark” – Trump has begun to blast Sanders as a “socialist/communist” bent on taxing Americans to the hilt. Trump repeated that claim today on the Fox News Sunday program.

Asked by Stephanopoulos about Trump’s attack, Sanders replied, “If I have to respond to every absurd thing Donald Trump said, I would spend my whole life doing that.”