I’m talking about Bernie Sanders again today, and in this post, I’ll be going over his “Making the Wealthy, Wall Street, and Large Corporations Pay Their Fair Share” section on his website. This is a really long section, but it looks like I’ve already covered portions of the stuff he mentions in this, so if that’s the case, I’ll link back to my commentary about them already done.
With that done, let’s dive in.
This plan is broken down into 5 major sections, each with a plethora of subsections that go off in every such direction imaginable. Stay with me here as we go through this.
Section 1: Reforming The Corporate Tax Code
#1. Ending Offshoring Profits
End the rule allowing American corporations to defer paying federal income taxes on profits of offshore subsidiaries.
I’m of the school of thought that taxes should be lowered, and there is a reason why the corporations that shield profit overseas. To start off, let me remind people about the Laffer Curve, and what it represents.
The Laffer Curve represents where tax rates are better placed. The red dot on the top of the graph represents the highest possible revenue when a government is setting a tax rate. Setting to the right of that point will mean that revenues begin to decline, and if it’s set to the left, that means that the revenues will still be smaller, but you can raise them later, and still get an increase in tax revenue.
When you raise the corporate income tax rate, you will have some companies who will look to somehow reduce that burden, and thus, they turn to holding their profits overseas, or some other gimmic. You could stop this if you actually cut corporate income tax rates, but knowing Bernie, he has every intention of jacking them up to pay for his increases in the Warfare-Welfare State.
Now, with that said, what would Bernie really do with the money? He say’s the following:
Senator Sanders would use the revenue gained by closing these loopholes to put at least 13 million Americans to work rebuilding our crumbling roads, bridges, railways, airports, public transit systems, ports, dams, wastewater plants, and other infrastructure needs.
As I’ve explained before, he isn’t going to do this, and it won’t work out the way he wants to, but he doesn’t really care about that. Not at all. It just sounds nice.
#2. Stopping Overseas PO Box Corporations
Prevent corporations from avoiding U.S. taxes by claiming to be a foreign company through the establishment of a post office box in a tax haven country.
Again, this wouldn’t be happening if the tax rates and regulations weren’t as bad as they are, and if the US had an actually business-friendly climate (lord knows liberals love good climates). But as I’ve mentioned already before, Bernie has no intentions of making any real improvements.
#3. Ending Fossil Fuel Corporate Tax Breaks
Eliminate tax breaks for big oil, gas, and coal companies.
So, I assume that Bernie is okay with tax breaks for green energy companies, like the now defunct Solyndra, which took (and lost) lot’s of government money. I agree with ending tax breaks, but where I differ with Bernie is that I want all tax breaks done away with, and I want a flat tax rate system. Bernie doesn’t want that. He wants the progressive style tax system that allows for special favors in the form of tax breaks. He is fine with this, because he thinks he can somehow encourage growth and development in the Green Energy Sector, but in reality, it’ll only create a bubble. The bursting will come if the rates ever go up, or the economy turns for the worst.
#4. Ending Corporate Inversion
Prevent American companies from avoiding U.S. taxes by corporate inversions.
Does anyone remember when Burger King made the news because it was inverting to Canada from the United States? What they did was buy up Tim Hortons (a REALLY good brand, in my opinion), and move their headquarters in Canada, and move from Florida. As Reuters reported:
Fast food chain Burger King will avoid hundreds of millions of dollars in U.S. taxes if, as planned, it completes its pending buyout of Canadian coffee-and-doughnuts chain Tim Hortons, a tax activist group said on Thursday.
Think about that for a second: hundreds of millions of dollars. Liberal tax groups claim that corporations are not paying their fair share (even though it’s often liberals who aren’t paying their “fair share”), but that implies that the government is automatically owns that money, when it doesn’t though. The government does not own a certain portion of people’s or companies profits, or else we do not have this thing called “freedom”. It means we are simply serfs (or slaves) to the government.
Now, back to Burger King. As I’ve stated already, they inverted because they saw that they would be able to grow better if they were based in a different country, and there’s no lie there. Look at the regulatory and tax climate the Federal Government has now. Is that anything favorable or even friendly to growth? Is it? It’s not, and if you can’t have growth, then you don’t have more to tax, which Bernie will need if he wants to pay for things.
#5. Stopping Corporations From Artificially Using Foreign Tax Credits
Close loopholes that allow U.S. corporations to artificially inflate or accelerate foreign tax credits.
Again, you wouldn’t need to worry about this if you had a simple flat tax, but Bernie doesn’t want that.
#2. Reforming the Estate Tax
#1. Raising the Estate Tax for the Top 0.3%
Exempt the first $3.5 million of an individual’s estate from the estate tax.
“Oh, well this doesn’t even effect the bottom 99.7% of Americans.” Okay, great. What entitlement does the government have to a person’s money when they die? Like, is it because they’re no longer alive, and thus, no longer productive, so the government just taxes them for dying? The Estate Tax (aka the Death Tax) is rediculous, and needs to be eliminated completely, not reformed or toyed around with, like with what Bernie wants. A tax for dying makes no sense, and raising that tax won’t create the growth that Bernie wants either. If anything, it’ll mean that top 0.3% of people will disperse their money before their death, so to avoid the increased rate.
#2. Making the Estate Tax MORE Complex
Establish a new progressive estate tax rate structure as follows:
45 percent on the value of an estate between $3.5 million and $10 million.
50 percent for the value of an estate between $10 million and $50 million.
55 percent for the value of an estate in excess of $50 million.
See Section 2, Point #1.
#3. Billionaires Surtax
Include an additional billionaire’s surtax of 10 percent.
A surtax is a tax that is levied on TOP of another tax. Meaning, that if say there is a progressive income tax rate of 75%, and this is applied, the tax rate is at 85%. Now, the plan for this is that it only apply to the 500+ Billionaires living in the US. I wonder how accountants would plan to get their clients out of this one, just like they work so hard to lower their clients tax bills. As usual, and Bernie will not be able to stop this, these people will avoid how bad this is supposed to be, by having their deductions tax out a large portion of their “fair share”. Don’t be childish with me Bernie, this is useless.
#4. Ending Tax Breaks for Dynasty Trusts
End tax breaks for dynasty trusts.
For those who didn’t know, a dynasty trust is a trust fund set up by a really wealthy family to control and keep their wealth. It’s better than letting it sit around and losing it’s value via inflation. In all reality, if you could do this, you would, which is why I have no problem with this. However, Bernie does.
I have no problem with ending tax breaks for everything. Bernie and I agree here, but as I’ve stated before, he doesn’t go far enough, in that I want all tax breaks gone. Bernie is okay with tax breaks for his preferred
clients I mean economic sectors. That’s where I have a problem with him on this.
#5. Ending Loopholes in the Estate Tax
Close other loopholes in the estate and gift tax, including valuation discounts.
Again, I will say that we should end all tax breaks. Again, I will say that we should end the Estate Tax. Punishing people who have been successful isn’t something to be proud of Bernie.
#6. Land Conservation & Easements
Protect farm land and conservation easements.
“Senator Sanders’ plan would protect family farmers by allowing them to lower the value of their farmland by up to $3 million for estate tax purposes.
This plan would also increase the maximum exclusion for conservation easements to $2 million.”
What is this? Just end the Estate Tax. “Lower the value of their farmland” does anyone else feel like that sounds really stupid?
#3. Tax Wall Street Speculators
I’ve already covered taxing speculators and such in a different post. Next.
#4. Lift the cap on taxable income that goes into the Social Security Trust Fund
“Right now, someone who earns $118,500 a year pays the same amount of money in Social Security taxes as a billionaire. This makes no sense.” It actually does, UNLESS, you believe that it is not a “retirement fund” that an individual saves for, but it’s a slush fund that everyone pools into. In which case, Bernie needs to stop lying about SS. Social Security is a scam, and it needs to be stopped, but I would start with letting people opt-out of it.
#5. Reforming the Personal Income Tax
I feel like I’ve already covered this, but I’m not sure where though.
#1. Ending Breaks on Capital Gains + Dividends
End Tax Breaks for Capital Gains and Dividends for the Wealthy.
Again, see Section 1, Point 3.
#2. Higher Income Tax Rates
This plan would replace the top three income tax rates (33%, 35%, and 39.6%) with more progressive rates:
37% on income between $250,000 and $500,000.
43% on income between $500,000 and $2 million.
48% on income between $2 million and $10 million. (In 2013, only 113,000 households, just 0.08 percent of all taxpayers, had income between $2 million and $10 million.)
52% on income of $10 million and above. (In 2013, only 13,000 households, just 0.01 percent of taxpayers, had income exceeding $10 million.)
Remember the Laffer Curve from Section 1, Point 1? Apply this to Personal Income Taxes as well. It works the same way.
#3. Limiting Deductions for the Rich
Our tax code has several complex provisions to limit the benefits of tax breaks for the wealthy, including the Alternative Minimum Tax, the personal exemption phase-out (PEP) and the limit on itemized deductions. This plan would replace these provisions with a simpler one limiting the tax savings for each dollar of deductions to just 28 cents for high-income households.
As with tax breaks, I’m for getting rid of ALL tax deductions, and as Bernie can be seen here, he isn’t. He’s for only cutting tax deductions for the wealthy. Again, this wouldn’t matter if Bernie stood for a flat tax and smaller government, but since he stands against those two things, he can’t stand for equality.
To be short, this was way too long, too overdone, and really excessive. But that’s what big government is about. Everything has to be complicated, and everything has to be big. I may have a thing for bigger girls, but I don’t think “bigger is better” when it comes to government. In fact, it makes things worse.
I’ve done a whole lot of posts covering Bernie Sanders and his platform. You should go read some of them if you thought this was informative. Click on this link to be taken to the page where I keep all these cataloged: [Link]