Presidential candidate Bernie Sanders’s tax plan would raise $15.3 trillion over a decade by increasing taxes across all income brackets and increasing tax rates for investment income, according to a new analysis.
A large portion of the new revenue would come from increased payroll and income taxes that the Democratic senator from Vermont has promised will help fund universal government health care and free college tuition. The average tax increase would be around $9,000 per household, but wealthy earners would see the largest jump in their tax bill. People earning over $3.7 million a year would see their taxes go up an average of nearly 45 percent, according to analysis released Friday by the nonpartisan Urban-Brookings Tax Policy Center.
Sanders has been upfront about his proposal to increases taxes on all earners and has defended his plans in speeches and debates throughout the campaign. He has argued that the overall benefits from his spending plans will far outweigh the increased tax bills most people would receive.
It is unclear if the revenue raised by the tax increases would be enough to fund those plans. Sanders has released a detailed list of cost estimates, but economists from across the political spectrum have been unable to agree on the accuracy of those calculations or agree on a figure of their own. The center’s analyses focus on the candidates’ tax proposals, not their corresponding spending plans.
Sanders would raise significantly more revenue for his programs than his competitor Hillary Clinton, who would raise approximately $1.1 trillion according to a Tax Policy Center analysis released Thursday.
Analysts said it is difficult to compare the two plans because they take drastically different approaches to tax policy. Clinton focuses on changes to current tax law, such as increasing tax rates and applying a surtax on wealthy taxpayers.
The Sanders campaign said it is “unfair and misleading” to analyze the tax plan without also factoring in the economic impacts of his spending proposals.
“Not only did the Tax Policy Center fail to estimate the savings the American people will gain under Medicare-for-all, they also fail to count the economic gains that would be achieved by Bernie’s plan to rebuild the middle class,” said Sanders policy director Warren Gunnels.
Gunnels said Sanders’ proposals to expand Social Security, increase the minimum wage to $15, invest in repairing aging roads and bridges and expanding college access will boost the economy. A recent study from the progressive group Citizens for Tax Justice found that take-home pay for middle class workers would go up by around $3,200 a year.
The Sanders plan relies on several tax proposals that have never been attempted in the United States, including a $15 per ton tax on carbon emissions that would rise over time and a new tax on financial transactions.
“They really couldn’t be more different,” said Tax Policy Center director Leonard Burman. “Clinton clearly decided to make more modest changes. Sanders clearly wanted to change things radically.”
Clinton’s and Sanders’s plans do share some common elements, such as higher taxes on investment income and additional surtaxes for top earners. The two Democrats also stand in stark contrast to GOP candidates who have focused on cutting tax rates and creating incentives for savings and investment.
The center has provided analysis for all of the 2016 candidates’ tax proposals and focused first on the Republican field.
It earlier found that over the next decade business mogul Donald Trump’s plan would cost about $9.5 trillion, Florida Sen. Marco Rubio‘s proposal would cost $6.8 trillion and Texas Sen. Ted Cruz’s plan would cost $8.2 trillion.
Burman and other analysts said it is very difficult to estimate the impact of Sanders’s plan on the overall economy because so many of the proposal are untested on U.S. taxpayers. Many supply-side economist have argued that across-the-board tax increases would drastically change the way people and businesses invest, save, hire and make employment and growth decisions. The center did not try to closely analyze those effects in the most recent set of reports.