Wednesday, January 30, 2019

Bernie Sanders, Alexandria Ocasio-Cortez Agenda Fiscally Unworkable

In his 2016 presidential campaign, Sanders proposed broad-based tax increases on virtually all Americans.

These tax increases must be distributed broadly across the U.S. population - and they must be truly enormous, so big that nobody, not even Bernie Sanders, has had the courage to propose them.

MIT economist Jonathan Gruber, who advised Democrats on the policy, later explained that the strategy for the tax was "Mislabeling it," by "Calling it a tax on insurance plans rather than a tax on people when we all know it's a tax on people who hold those insurance plans."

While insurance companies would write the check for the Cadillac tax, incurring the legal incidence, they would also likely raise the cost of plans eligible for the tax, passing on the tax to the insured.

Since the insured still loses money because of the tax, he incurs the economic incidence of the tax.

The JCT model suggests that people respond to tax increases in ways that will be unhelpful to Democrats.

In many cases, especially in the short run, the increase in the tax rate is swamped entirely by this effect, meaning tax hikes on capital gains could lose revenue.

https://www.nationalreview.com/2019/01/bernie-sanders-alexandria-ocasio-cortez-fiscal-policies-unworkable/

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