Editorial: Republican candidates’ tax proposals out-of-touch

If you haven’t heard Presidential hopeful Sen. Bernie Sanders, Ind-Vt., complain about how little the “billionaire class” pays in taxes by now, you might as well have never heard him speak at all.

“Let me tell you, Donald Trump and his billionaire friends under my policies are going to pay a hell of a lot more in taxes today — taxes in the future than they’re paying today,” Sanders said at last week’s Democratic primary debate in Las Vegas.

Sanders’ competitor, leader in the Democratic primary polls, Hillary Clinton, agreed, despite being a member of the one percent herself.

“Right now, the wealthy pay too little,” Clinton said at the same debate.

Both Democratic candidates seem to believe that a tax hike on the wealthiest one percent will solve many ills in our country. A hike will pay for universal access to higher education, as Sanders has proposed. Alternatively, it can give Washington more than enough cash to provide financial relief for students facing mountains of debt from unpaid student loans, as Clinton has proposed.

The benefits of a top-earner tax hike seem almost too good to be true, but as Patricia Cohen reported for The New York Times last Friday, mainstream economists have said these campaign promises could actually work.

“Most economists today would agree that raising taxes modestly would bring in more revenue” without doing any serious damage to the economy, Roberton Williams, a fellow at the Tax Policy Center, told The New York Times.

Nonetheless, all the Republican candidates have proposed tax cuts for America’s wealthiest earners. They say higher taxes would discourage job creation and overall growth. In that, assuming the top one percent consists solely of employers, higher taxes will lead them to spend less on job creation, inhibiting the growth of the middle class in the process.

Yet, as the one percent continues to stretch their incomes, the average income in the middle class remains relatively stagnant. According to the U.S. Census Bureau, the average income of earners in top 20 percent grew by 42.6 percent between 1979 and 2012, when adjusted for inflation. Meanwhile, the average incomes of earners in the middle 60 percent grew by only 9.5 percent.

Republicans need to forget continued relief schemes  — a tax hike on top-earners is needed to grow the middle-class.

Why? According to the The New York Times report, increasing the tax rate on the top one percent from accounting for a third of their income to 45 percent would bring in a total $276 billion to the government — while still leaving at least $1 million left over for the majority of one-percent households. In fact, just increasing the tax rate on the 0.1 percent of earners to a 40 percent rate would produce $55 billion in extra revenue.

“That would more than cover, for example, the estimated $47 billion cost of eliminating undergraduate tuition at all the country’s four-year public colleges and universities,” wrote Cohen.

Seeing that education is currently the main route to a livable wage in this country, more affordable education for all certainly has the potential to push more people in the middle class and keep them there.

A tax hike could also decrease the costs associated with health care and child care, as the government could afford to expand medicare and subsidize public pre-k services.

This would be invaluable to middle-class families, considering that the costs associated with such services rose by more than $10,000 from 2000 to 2012 for the average middle-class family with two children, according to the Center for American Progress. Again, this is all while the average income within the middle class remained relatively stagnant.

Thus, Democrats like Sanders are not exaggerating when they harp on the positive effects taxes on higher income brackets can bring. Such policies can only help to grow and sustain a middle class.

Republicans should take note. A strong middle-class — not a few wealthy billionaires — is what we need to really “make America great again.”