Sen. Bernie Sanders of Vermont has repeatedly vowed to soak the rich with higher taxes to finance his cornucopia of proposals for helping the middle class, including free state college tuition for all, expanded Social Security benefits and a major surge in highway and bridge construction to create new jobs.
The self-styled Democratic Socialist and chief rival to Hillary Rodham Clinton for the Democratic presidential nomination says he would finance trillions of dollars worth of government programs by raising taxes on the wealthiest one percent of Americans, increasing the inheritance tax, slapping a transactions tax on Wall Street investors, closing generous loopholes and tapping into overseas corporate tax havens.
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As he pointed out again on Sunday in an appearance on ABC News This Week, a “massive redistribution of wealth” over the past three decades has “unfortunately gone in the wrong direction, from the middle class and working families to Donald Trump and his friends, the top one-tenth of one percent.”
“And yes, let me be very clear,” he said. “If we are going to make public colleges and universities tuition free, as I believe we have to do in the 21st Century, then yeah, we are going to have a tax on Wall Street speculation and yes we’re going to ask Trump and his billionaire friends to pay more in taxes.”
So it was a little jarring to hear Sanders say that one of the tax proposals he has in mind to finance a key spending measure would hit not only wealthy Americans but also middle class wage earners and even working poor families who live just above the poverty line.
That’s because Sanders’ $319 billion proposal for providing paid family and medical leave would be financed by a small increase in the federal Social Security and Medicare FICA payroll tax that all working Americans must pay.
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Sanders is modeling his plan to provide paid family and medical leave – including maternity and paternity leave – after legislation reintroduced in March by Sen. Kirsten Gillibrand (D-NY). That plan would be financed by raising the current 6.2 percent FICA tax rate for both employees and employers by two-tenths of one percent.
The additional payroll tax revenue would be automatically deducted from paychecks and funneled through an independent trust fund established within the Social Security Administration. The payroll tax applies to annual incomes of up to $118,500 and proportionately hits lower income wage earners harder than higher income Americans.