Bernie Sanders has attracted a devoted segment of the electorate partly largely by promising to tax the rich special interests, especially on their loopholes. Unfortunately, his segment is likely to remain a segment: tax equity bores general election voters, few of whom see the connection between these tax loopholes and their own tax burden. Otherwise the tax code would never have evolved the way it has.
So what if, instead of simply railing against giveaways to special interests, Bernie made that connection clear and immediately relevant? What if he did a little math and calculated that the three most indefensible loopholes in combination force every taxpaying household to pony up at least $400/year extra to subsidize them? That simple math would make taxpayers more painfully aware of this subsidy.
And what if, instead of just making the math clear, he made it immediately relevant? How about offering to directly refund this subsidy to every taxpaying household?
Collectively, the components of this subsidy could be called the "corruption tax." The definition of a "corruption tax" is a transfer of wealth to the very rich or well-connected that blatantly lacks economic merit. The economic platforms of these two otherwise completely dissimilar candidates could be summarized in the slogan: "Repeal the Corruption Tax. And, more tangibly, refund it to the rest of us.
The $400/household is comprised of three specific corruption taxes, not just one -- but "Repeal the Corruption Tax" just sounds better in the singular than the plural. The first such tax is the "carried interest" loophole, allowing billionaire hedge fund managers (and some others) to pay taxes on interest at capital gains rates. This windfall amounts to at least $10-billion/year.
Unless we are worried that we are running out of hedge funds, or unless hedge funds are a "social good" benefiting everyone, like education or public health, this preference has so little justification that even the ultimate establishment candidate, Jeb Bush, says he will end it (while apparently replacing it with other giveaways). Donald Trump is also a big fan, and President Obama just proposed repealing it as part of budget negotiations, largely to make Republican legislators show their true colors.
Next would be special tax treatment and other direct subsidies for fossil fuel companies, roughly $21 billion/year. America is not running out of fossil fuels, and if it were, these subsidies wouldn't alleviate the shortage. (They did nothing to avoid gas lines in the 1970s.) Production and pricing of oil and gas is driven by price, technology and discoveries, not giveaways.
The third would be the government's self-imposed prohibition on negotiating drug prices. This costs about $10-billion/year in foregone discounts for Medicare. Imagine if you had to pay the sticker price every time you bought a car. That's what the government has agreed to do when it buys drugs.
These windfalls for special interests aren't found money -- the money comes from you and me... and our desire to get our money back is what's fueling Bernie's candidacy. (Also Trump's, to a degree. But no other candidate could credibly attack these taxes because they all get or want to get money from the people who benefit from them, as candidates have for years.)
No doubt there are more such hidden subsidies, but just these three, when divided by the nearly 100-million income tax-paying households, require each individual tax return to cover the aforementioned $400/year to subsidize people who by definition don't need the money.
The bottom line: If Bernie Sanders really wants to be president, adoring segments alone won't get him there. He needs to take the next step: Stuff the wallets of the average voter with refunded special interest subsidies. Don't just rail against the Corruption Tax. Repeal it... and let the rest of us pocket the difference.
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So what if, instead of simply railing against giveaways to special interests, Bernie made that connection clear and immediately relevant? What if he did a little math and calculated that the three most indefensible loopholes in combination force every taxpaying household to pony up at least $400/year extra to subsidize them? That simple math would make taxpayers more painfully aware of this subsidy.
And what if, instead of just making the math clear, he made it immediately relevant? How about offering to directly refund this subsidy to every taxpaying household?
Collectively, the components of this subsidy could be called the "corruption tax." The definition of a "corruption tax" is a transfer of wealth to the very rich or well-connected that blatantly lacks economic merit. The economic platforms of these two otherwise completely dissimilar candidates could be summarized in the slogan: "Repeal the Corruption Tax. And, more tangibly, refund it to the rest of us.
The $400/household is comprised of three specific corruption taxes, not just one -- but "Repeal the Corruption Tax" just sounds better in the singular than the plural. The first such tax is the "carried interest" loophole, allowing billionaire hedge fund managers (and some others) to pay taxes on interest at capital gains rates. This windfall amounts to at least $10-billion/year.
Unless we are worried that we are running out of hedge funds, or unless hedge funds are a "social good" benefiting everyone, like education or public health, this preference has so little justification that even the ultimate establishment candidate, Jeb Bush, says he will end it (while apparently replacing it with other giveaways). Donald Trump is also a big fan, and President Obama just proposed repealing it as part of budget negotiations, largely to make Republican legislators show their true colors.
Next would be special tax treatment and other direct subsidies for fossil fuel companies, roughly $21 billion/year. America is not running out of fossil fuels, and if it were, these subsidies wouldn't alleviate the shortage. (They did nothing to avoid gas lines in the 1970s.) Production and pricing of oil and gas is driven by price, technology and discoveries, not giveaways.
The third would be the government's self-imposed prohibition on negotiating drug prices. This costs about $10-billion/year in foregone discounts for Medicare. Imagine if you had to pay the sticker price every time you bought a car. That's what the government has agreed to do when it buys drugs.
These windfalls for special interests aren't found money -- the money comes from you and me... and our desire to get our money back is what's fueling Bernie's candidacy. (Also Trump's, to a degree. But no other candidate could credibly attack these taxes because they all get or want to get money from the people who benefit from them, as candidates have for years.)
No doubt there are more such hidden subsidies, but just these three, when divided by the nearly 100-million income tax-paying households, require each individual tax return to cover the aforementioned $400/year to subsidize people who by definition don't need the money.
The bottom line: If Bernie Sanders really wants to be president, adoring segments alone won't get him there. He needs to take the next step: Stuff the wallets of the average voter with refunded special interest subsidies. Don't just rail against the Corruption Tax. Repeal it... and let the rest of us pocket the difference.
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