Real estate mogul Donald Trump slammed Sen. Bernie Sanders (I-Vt.) for wanting to raise taxes to 90 percent, a claim Sanders denies. So who’s right?
At a campaign rally in South Carolina, real estate mogul Donald Trump told the crowd, “This guy [Bernie Sanders] wants to raise your taxes to 90 percent.”
Sanders, a self-described “democratic socialist,” responded, “It appears that Donald Trump, a pathological liar, simply cannot control himself. He lies, lies and lies again. Today, he repeated his lie that I want to raise taxes to 90 percent. Totally untrue.”
PolitiFact, which has a bad habit of leftist editorializing instead of nonpartisan fact-checking, rated Trump’s claim as “Pants on Fire” when he said something similar in October, which it explained in a statement that read like a Sanders campaign talking points:
Trump said Bernie Sanders is going to “tax you people at 90 percent.”
Sanders hasn’t released an official tax plan, either for billionaires or for anyone else. But based on his previous comments and proposals, the tax policies Sanders is advocating are targeted at corporations and affluent Americans.
Sanders has dismissed the notion that he wants to set marginal tax rates for billionaires at 90 percent. But even if he did end up doing that, that rate wouldn’t affect “you people” — that is, the rank and file Americans who attended Trump’s rally.
While it is true that Sanders hasn’t specified how high he will raise taxes, he is open to raising them to 90 percent.
In May, CNBC’s John Harwood asked Sanders if a 90 percent tax rate was too high.
“No,” Sanders said. “What I think we’ve seen, and what frightens me again, when you have the top one-tenth of 1 percent owning almost as much wealth as the bottom 90 percent. Does anybody think that that is the kind of economy this country should have? Do we think it’s moral?”
Based on that statement, it would appear that Sanders has no problem taxing certain people at 90 percent. PolitiFact acknowledged the statement, but dismissed it because he had previously denied wanting to raise taxes that high, which is really just PolitiFact’s disingenuous way of ignoring Sanders’s statement.
PolitiFact also took issue with the fact Trump made it seem like Sanders wanted to raise taxes to 90 percent on everyone. While it is likely that Sanders’ proposal would only target the wealthy and corporations, the cost of Sanders’ democratic socialism would likely result in onerous tax rates on everybody.
Radio host and constitutional scholar Mark Levin writes in Liberty and Tyranny: A Conservative Manifesto:
In 2008, the Congressional Budget Office (CBO) projected that if Social Security, Medicare, and Medicaid go unchanged, by 2082 “the tax rate for the lowest tax bracket would increase from 10 percent to 25 percent; the tax rate on incomes in the current 25 percent bracket would have to be increased to 63 percent; and the tax rate of the highest bracket would also increase from 35 percent to 88 percent. The top corporate income tax rate would also increase from 35 percent to 88 percent. Such tax rates would significantly reduce economic activity and would create serious problems with tax avoidance and tax evasion.
Sanders’ proposals would cost $18 trillion, according to The Wall Street Journal. Given the fact that Sanders is not interested in reforming entitlements, all this spending would likely result in onerous taxes on everybody that could reach 90 percent. The United States has a $17 trillion economy, meaning that confiscating every penny in the country wouldn’t be enough to pay for Sanders’s proposal, on top of the almost $19 trillion in fiscal operating debt and $210 trillion in unfunded liabilities. In that scenario, 90 percent taxes on everybody is very likely.
Despite what Sanders and his supporters say, just because the highest tax rate was 90 percent in the 1950’s does not mean they were a pro-growth policy. AEI’s James Pethokoukis points out that when deductions were included, the average top marginal tax rate was 31 percent, which isn’t much different from the mid-2000’s. Pethokoukis also cites a National Bureau of Economic Research study that said, “With industrial capacity destroyed in Europe—except for Scandinavia—and in Japan and crippled in the United Kingdom, the United States produced approximately 60 percent of the world output of manufactures in 1950, and its GNP was 61 percent of the total of the present (1979) OECD countries. This was obviously a transitory situation.” In other words, the U.S. was the dominant producer because the rest of the world was still recovering from World War II, so that era was a unique economic circumstance that is not applicable to today.
Trump may technically be wrong that Sanders is proposing a 90 percent tax rate, but Sanders has indicated that he is open to a 90 percent tax rate on some people and his proposals would force high tax rates on everybody that could reach high levels. PolitiFact’s “Pants On Fire” rating was, yet again, misleading.