Bramwell's Lunch Beat: Bernie’s Tax Hikes, Social Security Tax, New EU Tax Rulesby
Bernie's tax hikes: $10 trillion and counting
James Freeman of the Wall Street Journal wrote that tax increases proposed by Sen. Bernie Sanders would raise federal revenue by $9.8 trillion over a decade when accounting for the slower economic growth that would result. Assuming the Sanders changes have no economic impact, the plan would collect a whopping $13.6 trillion in additional tax revenue, according to a new Tax Foundation analysis released on Thursday. While the Sanders tax increases are much larger than the ones advocated so far by Hillary Clinton, they are similar in several respects. They both disproportionately target the top 1 percent of income earners, but result in economic pain shared by workers in all tax brackets. The Sanders program would reduce gross domestic product (GDP) by 9.5 percent below where it would otherwise be a decade after enactment of his program. And after-tax income for all taxpayers would fall by more than 10 percent when calculated on a static basis, and nearly 13 percent when accounting for this reduced GDP.
Hillary Clinton eyes changes to Social Security Taxes
Democrat Hillary Clinton said on Tuesday that she would consider subjecting investment income to Social Security taxes and would consider applying the tax to higher wages as a way to extend solvency of the program and expand benefits for the poorest seniors, wrote Laura Meckler of the Wall Street Journal. In 2008, Clinton opposed applying the payroll tax to higher levels of income, a popular idea with many Democrats. Under current law, only the first $118,500 of income is subject to the tax, a 6.2 percent levy paid by both employees and employers. On Tuesday, Clinton said she would support higher taxes, but cast that as primarily necessary in order to extend the life of the Social Security trust fund â to ensure the program can pay benefits as the number of retirees collecting benefits increases relative to the number of workers paying into the fund. âWe do have to extend the life of the trust fund and that's going to take some new funding,â she said.
The need for a tax on financial trading
The editorial board of the New York Times chimed in on why a financial transaction tax â a per-trade charge on the buying and selling of stocks, bonds, and derivatives â is an âidea whose time has finally come.â Hillary Clinton and Democratic rival Martin O'Malley have both proposed a worthy, but narrow, tax on certain high-frequency trades, which generate windfall profits on small and fleeting differences in prices at the expense of ordinary investors and market stability, according to the op-ed. Sen. Bernie Sanders supports a hefty tax on a broader range of transactions to raise revenue from Wall Street, also a worthy goal, but his proposal would be likely to squeeze investors too hard. âA well-designed financial transaction tax â one that applies a tiny tax rate to an array of transactions and is split between buyers and sellers â would be a progressive way to raise substantial revenue without damaging the markets,â the editorial board wrote.
EU sets sights on forcing firms to pay nations tax where due
Companies shouldn't be able to get away with paying very low taxes â or none at all â in countries where they earn profits, European Union (EU) Economic Affairs and Tax Commissioner Pierre Moscovici said on Thursday as he introduced a package of proposals designed to curb tax evasion, wrote Rebecca Christie of Bloomberg. âThe days are numbered for companies that aggressively reduce their tax bills,â Moscovici said. The commission has set a June goal for reaching political consensus on its proposals, which would require companies to share their country-by-country bills with tax authorities and would set minimum standards for EU nations when designing tax rules. The plans offer legally binding measures to block common tax-dodging strategies, according to commission documents. The EU commission also seeks to improve transparency and create more fair conditions for companies across the EU.
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- Comparing the revenue and GDP effects of Republican candidates' tax plans (Tax Foundation)
- Pelosi distances Democrats from Sanders' plan to raise taxes (The Hill)
- PATH is only one step in meaningful tax reform (The Hill)
- How big a deal was Congress extending the renewable energy tax credits? A very, very big deal. (Vox)
- Why the IRS should push tax day to June 15 (Huffington Post)
- The end of California's tampon tax could be near (Huffington Post)
- Google's tax deal with UK may be next in line for EU probe (Bloomberg)
- The UK gives Google a sweetheart tax deal (Bloomberg View)