Democratic debates

[JoeRedskin]

Read through BS's site at your link. He has two revenue generating points: Tax the wealthy and corporations so that they "pay their fair share" and removal of the $250,000 cap.

All the rest of his points require either vast expenditures by the state (free tuition, health care, childcare and pre-k) or increased expenditures by employers (requirements for sick leave, doubling the minimum wage, mandatory salary increases).

In addition, he would reinstitute protectionism through the revoking the various free trade agreements.

In response:

(1) As to his "tax the wealthy so they pay a fair share:" While the estimates and breakdowns vary depending on where you are getting your stats and how different forms of wealth transfers are accounted for (tax breaks, direct payments, etc.), it is undisputed that the top 1% of earners pay approximately 30 - 35% of federal income tax while earning approximately 15-20% of the income. Further, the top 25% of earners pay a greater percentage of the federal taxes (~85%) than the percentage of income they earn (65%) (To be in the top 25%, your adjusted gross income (that which you pay taxes on after deductions) has to be ~ 95K or more).

Whatever the measure, the numbers show just how dependent the U.S. has become on the earnings of the wealthy. The U.S. is more dependent on the income tax than other countries, with 37 percent of total government revenue coming from the income tax, compared with 24 percent in other countries. Those countries depend more on consumption taxes and other sources of revenue.

http://www.cnbc.com/2015/04/13/

The bolded part is important to me. As we become dependent on the top earners to pay more, it is important that we recognize that fact. Destruction of the wealth of top earners is destruction of much of our federal income.

Income inequality is a real thing, however, as every study shows that since the late 70's/early 80's the real income of CEO's has risen at a geometrically greater rate than that of workers:

The CEO-to-worker compensation ratio was 20-to-1 in 1965 and 29.9-to-1 in 1978, grew to 122.6-to-1 in 1995, peaked at 383.4-to-1 in 2000, and was 295.9-to-1 in 2013, far higher than it was in the 1960s, 1970s, 1980s, or 1990s.

CEO Pay Continues to Rise as Typical Workers Are Paid Less | Economic Policy Institute

I don't know the appropriate solution to the ensuring corporations fairly distribute their wages and cap CEO pay or tie a set worker income. I have no doubt to enact such legislation would be pretty damn difficult AND likely have some very unintended negative consequences. However, to me, this is the real problem with wealth distribution in the US.

Sanders policies do not touch this issue. The concept "tax the rich" is the welcome rallying cry of those disadvantaged in society. Robin Hood has always had his iconic appeal. However, the wealth of the US has been built by allowing people to be rich - even obscenely so. In doing so, the US has now built a particular and unique economy among western democracies. Bernie's plan does not account for this and seeks to kill the golden goose without creating a real restructuring of the manner in which income is earned.

(2) As to his various government spending programs: Bernie's transfers are simply pie-in-the-sky rehashed socialism in its most traditional form (wealth redistribution through government funded transfers). Such policies promise huge debts as the transferees vote larger and larger checks for programs they want while the wealth holders spend their wealth to shield it from transfer - or simply leave. Additionally, governmental wealth redistribution will always come with strings, increased dependence, and reduced economic and political freedom.

IMHO, and to preserve both our individual and our corporate (as in the entire society's) freedom, the country needs an effective way to restructure earnings in the corporate setting while preserving the ability to differentiate wages in a meaningful way and to permit (and encourage) entrepreneurship. Then, and only then, can we preserve real freedom of choice. Bernie's revenue generation and wealth transfer plan does none of this, and, in the long run, is antithetical to it.

(3) As to the employer mandates, decreeing that employers must pay their employees more either through direct payments (minimum wage, mandated salaries) or through mandated benefits (enhanced leave) means that fewer employees will be working or the same amount may be working but for lower salaries. It's simple math - if employer expenses go up without commensurate raises in income levels, cuts will come or the business will fold. This will increase government expenditures either through expanded income relief payments (welfare, Medicaid, etc.) or increased governmental employment ("We need to find work for these unemployed folks - let's pay them to fix roads"), etc. If the mandates become universal as Bernie desires, start ups will die and the only employers who will be able to afford to do business will be the large corporations and the government.

(4) Finally, by revoking the various free-trade agreements, all those lovely things we buy will suddenly become very very expensive.

corporate America wants us to buy their products they need to manufacture those products in this country, not in China or other low-wage countries

<sigh> Fine, get ready for prices to increases and reduction in your real income as those products manufactured by "corporate America" become three or four times as expensive to produce. (I am sure in Bernie's world, none of these increased production costs will be passed on to us - unfortunately, in my world, my computer and TV's just tripled in price).

Further, price increases on manufactured consumer goods is only one problem with protectionism. While import much more than we export, 13% of our GDP is made up of exports. Count on that shrinking as foreign countries enact similar protectionist measures targeted against us and simply buy their exports from someone else (BTW - shrinking exports = increased unemployment).

Bernie's entire plan is not just tired, blatant pandering to class warfare, it is structurally unsound and self-defeating. Ultimately, his vision for America is a nation of government employees working for an increasingly indebted employer as real economic freedom is reduced further and further.