Economists Who Bashed Bernie Sanders’ Tax Plan Admit They’re Clueless: “We’re Not Really Experts”|
The DC establishment’s latest attack on Bernie Sanders’ tax plan has just been thoroughly debunked.
On Friday afternoon, the Tax Policy Center (TPC) — a project of centrist think tank Brookings Institution — published a thoroughly-flawed analysis of Bernie Sanders’ tax plan. The TPC claimed that by raising $15.3 trillion in new revenue over ten years to fund Sanders’ proposals for free public college, universal health care, paid family and medical leave, and millions of new infrastructure jobs, the overall income of the average American would drop by approximately 12 percent.
However, the analysis was fundamentally disingenuous, as it analyzes the tax increases in a vacuum and does not account for the tremendous amount of savings that would be realized by families using public health insurance and colleges. It also does not account for the overall economic benefit of 13 million new public sector jobs and the resulting flow of new money into the economy.
“We do not account for the effects of the new government programs on income,” TPC co-founder Leonard Burman told Politico, in a revealing quote buried thirteen paragraphs below Politico‘s misleading headline. “We’re not really experts on the spending component.”
Neither Politico nor the TPC bothered to compare Sanders’ new tax rates, which most adversely affect the richest 0.1 percent of Americans, with the amount of money families would save should Sanders’ proposals become reality.
Warren Gunnels, who serves as Sen. Sanders’ senior policy adviser, pointed out in a scathing press release that had the TPC bothered to do the comparative math, they would have found that an overwhelming majority would have more money in their pockets under Sanders’ proposals, not less. Gunnels pointed to a study by the nonpartisan think tank Citizens for Tax Justice (CTJ), which compared the new taxes to fund Sanders’ health care plan with the money families would save under a hypothetical single-payer health care system in the US.
“The analysis from Citizens for Tax Justice found that 95 percent of American households will see their take-home pay go up, not down, under Sanders’ Medicare-for-all plan, which is paid for by his progressive tax plan,” Gunnels said. “Citizens for Tax Justice also found that middle-class families would see their take-home pay go up by more than $3,200 a year under Sanders’ plan.
According to CTJ’s analysis, everyone but the richest 5 percent of Americans would end up with a higher after-tax income under a single-payer health care system. CTJ arrived at their numerical conclusions using a microsimulation model from the Institution on Taxation and Economic Policy:
CTJ explained that, after doing a side-by-side comparison with Sanders’ tax plan and the money saved from single-payer health care, it was clear both workers and businesses would save money.
“The reason that Sanders’ plan increases average after-tax incomes for all but the highest-income groups, even as it substantially increases tax revenues, is that the plan would replace employer-provided health care with universal health insurance for all Americans,” CTJ wrote. “Thus, workers would get comprehensive health insurance in addition to higher wages.”
Gunnels continued to tear apart the TPC’s flawed analysis by pointing out that the economists ignored the significant economic boost of 13 million new public sector jobs, all of the money Americans would keep by not having to pay for public college tuition, and Sanders’ proposal to expand Social Security, which would leave retirees with more after-tax income.
“Sanders has a plan to create and maintain at least 13 million jobs rebuilding our crumbling infrastructure. It is widely accepted among many economists that rebuilding roads, bridges, drinking water facilities, airports and other infrastructure needs creates jobs for Americans in the short-term while allowing commerce to flow more smoothly in the long-term, a win-win for prosperity in the U.S. The Tax Policy Center did not look at that.
“Sanders has a plan to make public colleges and universities tuition free that would save the typical middle class family $9,400 a year. Creating a workforce that is more educated and less bogged down in student debt would benefit the economy immensely. The Tax Policy Center did not look at that.
“Sanders’ has a plan to extend and expand Social Security boosting the income of senior citizens by an average of about $1,600 a year. The Tax Policy Center did not look at Bernie’s plan to expand Social Security.
Read Gunnels’ full statement debunking the study here.