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How Bernie Sanders’ Tax Plan Can Close the Huge Racial Wealth Gap

America needs a new tax policy that would get our financial house in order while fostering racial and economic fairness.

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Employees who receive health insurance through an employer, as 70 percent of Americans with insurance do, pay no tax on it. But the higher the value of the plan, the higher the deduction. With respect to housing, mortgage deductions are determined by your tax bracket. The higher your tax bracket, the more of your mortgage payment you can write off.

From the top to the bottom, our tax code puts money into the pockets of the elite and makes it harder for everyone else to make it. Fortunately, Sen, Sanders wants to do something about it.

Sanders’ plan raises over $2.5 trillion for deficit reduction by raising the capital gains tax rate to the same level as the income tax rate, eliminating the Bush tax cuts for the top 2 percent, and other measures aimed at equalizing the tax burden of the wealthy. His $2.5 trillion is more money for deficit reduction than either the current Democratic or Republican plan.

Sanders’ proposal also has ideas to zero-out corporate loopholes. If you factor in these fixes as well, the Vermont Senator’s deficit reduction package raises over $4 trillion. That’s two times larger than the sums contained in the deficit proposals put forth by President Obama or House Speaker Jim Boehener.

Values More Than Numbers

Unlike the Republicans, Sanders accomplishes his balanced-budget goals without cuts to health, education or economic opportunity programs.

Both Obama and the Republicans agreed to $1 trillion in deficit reduction last year. The GOP has included another $1.4 trillion cuts in their plan. Obama has put an additional $400 billion in cuts to Medicare next year on the table.

Sanders’ plan achieves tax fairness and puts our national budget on a sustainable path not through magic, but with a different set of values.

“What we must not do … is move toward a balanced budget on the backs of the elderly, the children, the sick and the poor. Sadly, that is the approach that virtually all Republicans and some Democrats are advocating,” he wrote in a Politico op-ed.

The history of presidential leadership shows us that political values have generations-long consequences.

Reagan placed the interests of a small number of extremely wealthy people—most of whom were white—above everyone else. The guiding principle of his theory of economics, labeled as “trickle down” by the advisor who created it, was that the few should benefit first. Not surprisingly, Reaganomics bore fruit in exactly the way it was designed. But as Billie Holiday once said, it is a strange fruit with a bitter crop.

According to Stiglitz, up to 90 percent of the gains in recent years went to the top 1 percent of high-earners. According to the federal reserve, 96 percent of households in the nation’s top 1 percent are white.

If we are to have a different future, it’s time to listen to people like Sanders more and to everyone else a little less.

 

Imara Jones writes about economic justice for Colorlines.com

 
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