Progressives have recently put forward a lot of high-priced policy proposals, but a new study released Wednesday finds that it’s “arithmetically impossible” to pay for the “progressive agenda” by only raising taxes on the wealthy.
The report, authored by David Burton, Heritage Foundation senior fellow in economic policy, ran the numbers on long list of popular progressive policy promises and found that it’s impossible to cover their total costs by taxing only people who make over $200,000 per year.
Burton took estimated costs from a list of proposals, including the Green New Deal proposed by Rep. Alexandria Ocasio Cortez, D-N.Y, government-backed health insurance supported by 2020 Democrats like Sen. Bernie Sanders, Vt., and taxpayer-funded college tuition proposed by Sanders, and came up with a total aggregate price tag of $48 to $92 trillion over 10 years.
Burton then added the lower cost estimate to the current projected baseline spending level for the next 10 years and found that implementing those four agenda items would put the U.S. somewhere between 3rd place to Finland and France in government spending (on the low end) and spending that would “dwarf” the levels of “any other developed country.”
Burton then looked to tax numbers and concluded that even if the government were to confiscate 100 percent of the incomes of everyone making over $200,000 annually while also confiscating all the income of all corporations, it would raise “at most” $34.6 trillion. That amount is “between only 37 percent and 72 percent of the cost of the progressive agenda,” depending on the cost estimate.
“Even using lower cost estimates, confiscating every dollar earned by every taxpayer with incomes of $200,000 or more would only pay for about half of the progressive agenda,” the report’s summary says.
“And that figure is based on the false assumption that people would continue to work, save, and invest when subject to a 100 percent flat tax,” Burton continues. “The reality is that progressive promises can only be funded by increasing taxes on the middle class from three to 10 times their current level or, for a limited time, by dramatic and unsustainable increases in federal borrowing.”
That all translates to astronomically higher taxes for hardworking families and/or astronomically higher debt for their children to deal with.
The Heritage findings run contrary to the widespread assumption that America’s fiscal woes could be addressed if we just put the screws to the wealthy for more revenue. That’s far from the case. In fact, if the government were to tax every American billionaire for everything they were worth, we’d have enough revenue to make about a 14 percent dent in the national debt or fully fund a 4.75 trillion federal budget for just under eight months.