http://www.wsj.com/article_email/be...ich-myth-1445379556-lMyQjAxMTA1NDI4MjEyNzIyWj
Bernie Sanders and the Soak-the-Rich Myth
Liberals who want more revenue for redistribution ought to favor a tax code that’s less progressive.
Bernie Sanders has been asserting more forthrightly than any of his Democratic rivals that pretty much every domestic problem—from aging infrastructure to student debt to teenage acne—could be solved by raising taxes high enough on the super rich. Rarely do interviewers perform the public service of challenging his math, which is why the Vermont senator’s exchange Sunday with George Stephanopoulos of ABC News is noteworthy.
Mr. Sanders said that he is open to raising the current 39.6% top marginal income-tax rate to as high as 90%. The self-proclaimed “democratic socialist” also explained how he would increase the death tax “so that [Donald] Trump and his billionaire friends and their families will end up paying more.” Mr. Stephanopoulos replied that the numbers still don’t compute. “To pay for all of your programs, you’re going to have to do more than tax the top 1%,” he said. “How far below the top 1% are you going to go with tax hikes?”
The senator’s initial response was denial. “That’s not true that we have to go much further below [the top earners],” said Mr. Sanders, insisting that he could fund everything from tuition-free college to infrastructure repair simply by eliminating corporate tax breaks and implementing a financial transactions levy. When pressed, however, the senator conceded that his spending proposals require much more revenue than the Learjet set could produce. “Guaranteeing paid family and medical leave,” he allowed, would “require a small increase in the payroll tax,” and he then agreed with Mr. Stephanopoulos that the tax “would hit everybody.”
Not to pick on Mr. Sanders, whose campaign rationale is premised on the notion that President
Obama has been too fiscally conservative for the country’s good.
Hillary Clinton isn’t convinced that a majority of voters, including within her party, share the senator’s perspective, so she’s trying to stay to his right. But Democratic primary voters aren’t making it easy for Mrs. Clinton, and she played to the bleachers in last week’s Las Vegas debate by making Sandersesque promises to “make the wealthy pay” for all of her domestic priorities.
The irony is that liberals who want the federal government to secure more revenue for redistribution ought to favor a tax code that’s less progressive. Time and again, history has shown that the rich pay more when the top marginal rate is reduced. The income-tax rate on high earners fell to 24% in 1929 from 73% in 1921. Over that same period both the amount and fraction of taxes paid by the rich increased, while the amount and proportion of taxes paid by low earners went down.
