Bernie Sanders Explains How Taxing The Rich Will Pay For His Policies

But he admits it could take more than higher contributions from the top 1 percent alone.
Sen. Bernie Sanders (I-Vt.) insists that he can pay for his plans by taxing the rich.
Sen. Bernie Sanders (I-Vt.) insists that he can pay for his plans by taxing the rich.
David McNew/Getty Images

Sen. Bernie Sanders (I-Vt.) is adamant that only wealthy Americans will need to pay higher taxes to fund his proposals for expanding government social programs.

Bill Maher, who interviewed Sanders on HBO’s “Real Time” on Friday night, pressed Sanders on the point.

“Now this has been studied, the amount of tax revenue we would get just from taxing the people who I think your fans think you’re talking about -- the people who own a yacht -- does not come close to covering what you want to pay for,” Maher argued.

“Not true, not true,” the Democratic presidential hopeful responded.

Sanders then went through the largest items on his policy agenda -- Medicare for all; free college tuition at public institutions; higher Social Security benefits; and free child care -- and explained how each of them would only require asking more of wealthy Americans.

But Sanders acknowledged that he might need to raise taxes on more than the top 1 percent of earners.

“We may have to go down a little bit lower than that, but not much lower,” Sanders said.

The top 1 percent is made up of 1.13 million households with average incomes of $2.1 million a year, according to the Tax Policy Center. The New York Times estimates that increasing those households’ total tax burden from roughly one-third today to 40 percent would raise an additional $157 billion in revenue per year.

To put that amount in perspective, the Times noted that Sanders’ plan to cover the cost of undergraduate tuition at a public college or university would cost the federal government $47 billion.

Sanders intends to pay for his college plan, however, by taxing financial transactions. He has introduced Social Security legislation that expands benefits and extends the program’s solvency by eliminating the cap on taxable earnings, which currently means millionaires only contribute to the program on the first $118,500 they earn.

The senator told Maher he would pay for child care by closing corporate tax loopholes.

The arithmetic on a single-payer health care system is a little bit trickier. Although Sanders has not yet released a detailed single-payer plan, a similar bill introduced by Rep. John Conyers (D-Mich.) would be financed in part by payroll taxes on middle-income and wealthy earners.

An analysis of the plan by Gerald Friedman, an economist at the University of Massachusetts, Amherst, projects that Conyers’ bill would reduce overall health care costs by $592 billion per year, ultimately saving consumers money.

It is also not clear how Sanders’ promise not to tax the middle class squares with his paid family leave plan. He backs a bill introduced by Sen. Kirsten Gillibrand (D-N.Y.), which would finance a proposed mandate for 12 weeks of paid family and medical leave with payroll tax contributions from all workers.

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