Feb 12, 2016

Bernie Sander’s Tax Plan

Here’s the proposal:

Eliminates the alternative minimum tax.
Eliminates the personal exemption phase-out (PEP) and the Pease limitation on itemized deductions.
Limits the value of additional itemized deductions to 28 percent for households with income over $250,000.

Payroll Tax Changes

Creates a new 6.2 percent employer-side payroll tax on all wages and salaries. This is referred to by the campaign as an “income-based health care premium paid by employers.”
Creates a 0.2 percent employer-side payroll tax and 0.2 percent employee-side payroll tax, to fund a new family and medical leave trust fund.
Applies the Social Security payroll tax to earnings over $250,000, a threshold which is not indexed for wage inflation.

Business Income Tax Changes

Eliminates several business tax provisions involving oil, gas, and coal companies.
Ends the deferral of income from controlled foreign subsidiaries.
Changes several international tax rules to curb corporate inversions and limit use of the foreign tax credit.

Estate Tax Changes

Decreases the estate tax exclusion from $5.4 million to $3.5 million.
Raises the estate tax rate from 40 percent to a set of rates ranging between 45 percent and 65 percent.
Changes several estate tax rules involving asset valuation, family trusts, gift taxes, and farmland and conservation easements.

Other Changes

Creates a financial transactions tax on the value of stocks, bonds, derivatives, and other financial assets traded by U.S. persons. The rate of the tax ranges from 0.005 percent to 0.5 percent, depending on the type of asset.
Limits like-kind exchanges of property to $1 million per taxpayer per year and prohibits the use of like-kind exchanges for art and collectibles.

Now let’s figure out the actual tax rate for someone who makes 15 million in California.

The top rate in California is:

54.2 (base rate) + 0.2 (employee-side payroll tax) + 6.2 (social security now collected above 250k) + 1.45 (medicare) + 13.3 (California state tax)

= 75.55%

(Note: I may be missing something or miscalculating something. Please let me know if I am and I will correct this in the calculations).

For those of you crying fair, not foul, ask yourself this:

Would you go to work every day if your tax rate was 75.55%?

If so, vote for Bernie.