The 2016 election is about the future of the country.
Of the remaining presidential candidates, Hillary Clinton is the only one campaigning, in a sense, as the candidate of continuity. Clinton, the former secretary of state, is part of the political establishment and lives by its conventions. She is pragmatic, and if elected, would slog through the usual political muck, hoping to build more incrementally on President Obama’s progressive agenda.
By contrast, Democrat Bernie Sanders, as well as Republicans Ted Cruz and Donald Trump, are all running as candidates who will shake up the establishment and the status quo. Sanders, Cruz, and Trump each want to pursue very different, and radical, visions for the country.
This fact is made clear by their tax plans.
Sanders, the independent senator from Vermont, is unabashedly ambitious. As president, he would stretch the boundaries of the politically possible, aiming to force sweeping liberal initiatives through Congress. Make public colleges and universities tuition-free. Check. Expand and extend the solvency of Social Security. Check. Ensure paid family and medical leave to all workers. Check. Significantly invest in clean, sustainable energy to help combat climate change. Check. Expand health care coverage to every American. Check.
To do all of this, Sanders wants to absorb massive swaths of the private sector into the state – primarily by increasing taxes. Most increases would be targeted at wealthier households. For example, to make public colleges and universities tuition-free, Sanders wants to impose a tax on “Wall Street speculators” that would generate about $300 billion in revenue; to make Social Security solvent, he would lift the cap on taxable income above $250,000; and to expand health care coverage, he would alter the percentage of the health care premiums paid by employers, tax capital gains and dividends the same as income from work, and reduce tax expenditures. But some small tax increases would be required for lower- and middle-income households.
How much? Let’s run through an example.
Let’s assume you’re a family of four (married with two children), with a median household income of $55,000 – right around the current median household income in the U.S. Under Sanders’ tax plan, you would pay $6,120 more (tax rate: 19.4%) than you do now, according to Vox’s Tax Calculator.
(Note: Vox’s calculator has come under fire by some commentators, who have labelled it “manipulative” and “misleading” because it looks at taxes in a “vacuum” and does not take into account the benefits of Sanders’ other proposals. While this may be true, there is substantial uncertainty about the direct and indirect impacts of Sanders’ other proposals on taxes. Here, we are only concerned with the effects of the proposed tax changes. And on this point, only one thing is certain: Sanders is proposing a pretty substantial tax increase for the majority of Americans)
Trump and Cruz are doing what Sanders is doing in reverse. Both have proposed tremendous tax cuts, and their tax plans represent an embrace of the Republican anti-government orthodoxy: they want to dissolve massive swaths of the state into tax cuts.
Ted Cruz is proposing a full $8.6 trillion in tax cuts over a decade. Similarly, Donald Trump is proposing a whopping $9.5 trillion in tax cuts over a decade. The problem with each of these plans, however, is that neither Cruz nor Trump has uttered a word about how they’ll pay for them. Cruz, at least, has championed the idea of a Balanced Budget Amendment, so he can’t just add the tax cuts to the national debt. And we have to assume that Trump has envisioned some way to pay for his plan, unless he’s simply lying about his commitment to fiscal responsibility.
So how do we pay for these tax cuts? Let’s speculate.
What follows is not the only path, but it is one of the ways that you could get there. And as you can see, it gets very hard, very fast.
To get to the $8.6 trillion needed to pay for his tax cut, Ted Cruz could swing for the fences and end funding for Medicaid and the Children’s Health Insurance Program (CHIP). That will get him to a cool $4.7 trillion. He could then eliminate all education spending – Pell grants, the Department of Education, school nutrition, Head Start, everything. That gets him to roughly $5.7 trillion. Wiping out all justice spending – eliminating the FBI, the Drug Enforcement Administration, much of the Department of Justice, all United States attorneys, the entire federal judiciary, the Federal Bureau of Prison – could net another $561 billion. Targeting international spending – shuttering the State Department, closing all U.S. embassies and consulates around the world, zeroing all aid to developing nations, ending all military funding for allies – could net another $540 billion or so. Doing all of this will net us roughly $6.8 trillion in cuts (right at Marco Rubio’s proposed tax cut).
That leaves roughly $1.8 trillion remaining to be cut. So let’s end all federal transportation funding. The Coast Guard. Gone. The Transportation Security Administration. Gone. The Federal Aviation Administration. Gone. The Federal Highway Administration. Gone. Where are we now? Roughly $7.8 trillion (all of that only amounted to $935 billion?). To get the remaining $715 billion, Cruz could eliminate all spending on veterans. Goodbye, Department of Veterans Affairs, the Veteran Benefits Administration, the Veterans Health Administration, and the National Cemetery Administration!
But wait, there’s more. We can’t forget that Cruz has also promised to increase military spending by $2.4 trillion! And then there’s the issue of the Balanced Budget Amendment he’s so intent on having passed. More cuts, then, would be necessary.
If you thought that was a lot, we need even more to get to the $9.5 trillion needed to pay for Donald Trump’s tax cuts. To illustrate how massive that number ($9.5 trillion!) actually is, consider that the projected US deficit for the next 10 years is $9.4 trillion. Trump’s proposal, then, would more than double that total. But don’t worry, Trump wants to do all of this without touching entitlements. Phew – that should save Medicaid, CHIP, and a few other programs. But that also means that the path to $9.5 trillion is even harder. Oh, and naturally, Trump wants to increase spending on the military. Because why not?
To put this into perspective, the tax cuts George W. Bush proposed during the 2000 campaign were $1.32 trillion – which would be $1.82 trillion in today’s dollars. But taxes, it should be noted, were higher in 2000 than they are today. And Bush made such a proposal at a time when the country was running surpluses rather than deficits.
But these tax plans are not “wildly irresponsible” if your primary goal is to fundamentally transform the relationship between the government and the people. Sanders, out of a belief that it is the governments responsibility to protect and nurture its people, wants to increase taxes to raise money for increased government services. Trump and Cruz, in contrast, want to reduce taxes to, in the words of Grover Norquist, “get [the federal government] down to the size where we can drown it in the bathtub.” The changes in the tax code are simply a means of forcing that change.
We need to stop looking at these changes as representing the normal course of business in Washington, however. They are not. Each proposal is emblematic of radically different visions of what the federal government should do. And their extreme nature has not gotten nearly enough attention this election cycle.
The price tags clarify the reality of this election. The 2016 presidential election truly will decide the fate of the nation. What kind of government will you choose?
Featured Image Credit: GotCredit on Flickr (via creative commons)