The Bernie Sanders tax plan will raise taxes 2.2% for everyone, 15% for the very rich and nearly 20% for big corporations. The economy will see deep changes, though whether those will be for good or ill is open to debate.
How will the Bernie Sanders tax proposals affect you personally? The tables below show specific tax hikes for each income bracket. They also show the tax boost on corporations. We give an overview of opinions about Sanders’ proposed tax changes in the media below. We also cover the full spread of changes, because ultimately the Bernie Sanders tax plan doesn’t just come down to a simple percentage boost for every bracket.
Opinions on the Bernie Sanders Tax Plan
Opinions on the Bernie Sanders Tax Plan | |||
|---|---|---|---|
| Source | Yes/No | Source Type | Opinion Details |
| Bernie Sanders Campaign | Yes | Bernie Sanders | The Bernie Sanders tax plan is needed to combat massive and growing income inequality. Rich Americans and corporations need to pay their fair share. |
| TaxFoundation.org | No | Somewhat conservative think tank | The Bernie Sanders tax plan would hurt the economy and actually lower tax revenue based on financial modeling. The economy would shrink by 9.5% |
| The Motely Fool | No | Financial blog | The Bernie Sanders tax plan would boost tax revenues but cause less spending, less business startups and less job creation. |
| Forbes | No judgement | Financial publication | Forbes calls the Bernie Sanders tax plan "aggressive." Forbes points out that taxes on the poor to middle class wouldnt change much but the rich and corporations would see unprecedented taxes. |
| The New York Times | Maybe | National news source | The NY Times says the Bernie Sanders tax plan may raise taxes so high it will encourage top earners to earn less. This may decrease actual tax revenue. (Based on economic modeling at M.I.T.) |
| Paul Krugman | No | Left-leaning economist and pundit, possibly pro Clinton | Krugman says the Bernie Sanders tax plan lacks detail. He also says the math doesn't seem to add up, with too much generosity and not enough revenue to pay for it. |
| FeelTheBern.com | Yes | Pro Bernie Sanders group | Feel the Bern says the Bernie Sanders tax plan would fix the tax code to make the rich and corporations pay their fair share. |
| TaxProfBlog | No judgement | Law professor | TaxProfBlog says the Bernie Sanders tax plan would raise taxes on corporations until they equal the tax rates for individuals. |
| Time | Yes | National news source | Time magazine says there will be winners and losers if the Bernie Sanders tax plan is made into law. The plan will cause major healthcare savings for lower income Americans and major tax boosts for wealthier families and corporations. |
| CNN | No judgement | National news source | CNN says the Bernie Sanders Tax plan will cause the biggest tax hikes in recent history. The hike will hit the rich especially hard but will also hit middle income families. |
The table above shows opinions in the media about the Bernie Sanders tax plan. Media outlets and pundits who are for the plan say it will finally make the rich and corporations pay their fair share. Those against the plan say it will hurt the economy. Most notably in this camp, conservative think thank TaxFoundation.org says the U.S. economy would shrink 9.5% under the Bernie Sanders tax changes. On the other side of the aisle, Time says lower income families will get a huge healthcare cost savings from the plan.
Also see: What is Bernie Sanders’ Net Worth?
Pros and Cons of the Bernie Sanders Tax Plan
Bernie Sanders Tax Plan Pros and Cons | |
|---|---|
| The argument for the Bernie Sanders tax plan | The Bernie Sanders tax plan will make corporations and the rich pay their fair share. It will provide huge healthcare savings for low income families. |
| The argument against the Bernie Sanders tax plan | The Bernie Sanders tax plan will hurt by taking money from the private economy, effectively shrinking the economy and destroying jobs. It will result in less public money overall. |
There are two main arguments in the debate around the proposed Bernie Sanders tax changes. The argument for the changes is that they’ll finally make corporations pay their fair share. The reasoning goes, why shouldn’t corporations pay as much taxes as people do? The plan will also create a sorely needed healthcare cost cut for poor and lower income families. A family of four that earns $50,000 per year would see their cost drop thousands to just $466 per year. Corporations may claim it will be hard for them to create jobs with higher taxes, but they aren’t creating jobs with lower taxes anyway.
The argument against the Bernie Sanders tax changes is that it will gut the economy. The reasoning goes, corporations are already struggling to stay afloat, with many closing and cutting jobs. With higher taxes, the economy will suffer and more corporations will go out of business. The U.S. will be unable to compete with countries that have lower corporate taxes. Finally, the tax hike will take so much wind from the economy’s sails that tax revenues will actually go down. The U.S. will be forced to cut healthcare and families will lose their cost savings after all.
Also see: 5 U.S. Senators Worth Less Than Bernie Sanders
Bernie Sanders Tax Rate for Individuals (vs Current Tax Rates)
The Bernie Sanders Tax Plan: How Much You'll Pay | |||
|---|---|---|---|
| Regular Income | Tax Rate (now, single filers) | Bernie Sanders Tax Rate (future, single filers) | Bernie Sanders Tax Rate (Plus Avg. State Tax and other taxes) |
| $0 to $9,275 | 10% | 12.20% | 18.60% |
| $9,275 to $37,650 | 15% | 17.20% | 23.60% |
| $37,650 to $91,150 | 25% | 27.20% | 33.60% |
| $91,150 to $190,150 | 28% | 30.20% | 36.60% |
| $190,150 to $413,350 | 35% | 35.20% | 41.60% |
| $413,350 to $500,000 | 39.60% | 39.20% | 45.60% |
| $500,000 to $2,000,000 | 39.60% | 45.20% | 51.60% |
| $2,000,000 to $10,000,000 | 39.60% | 50.20% | 56.60% |
| $10,000,000+ | 39.60% | 54.20% | 60.60% |
The table above shows tax rates now vs the proposed Bernie Sanders tax changes. Everyone will see at least a 2.2% tax hike. Deeper changes happen higher up the income scale.
Those who earn $413,350 or more currently pay a flat 39.6% federal income tax. That’s the highest rate in the nation, whether a taxpayer earns $450,000 a year or $50 million. Sanders proposes to change that. The Bernie Sanders tax plan adopts three new brackets. Those who earn $500,000 to $2 million would pay 45.2%. People who earn $2 million to $10 million would pay 50.2%. Anyone above that would pay 54.2%.
The Bernie Sanders tax plan doesn’t include state taxes. With an average state tax of 6.4%, people in the highest bracket would actually pay 60.6%. California has a top state tax bracket of 13.3%. Rich Californians could therefore pay as much as 67.5%. With local and other taxes factored in, some estimates place the new top tax rate as high as 73% of income. That means someone who earns $50 million a year would now pay $36.5 million of it in taxes.
The chart below shows how the Bernie Sanders tax changes look graphically.
Also see: Bernie Sanders Fundraising 2016
Corporations and the Bernie Sanders Tax Plan
How the Bernie Sanders Tax Plan Affects Corporations | |||
|---|---|---|---|
| Income | Tax Now | Sanders | Add Other |
| $0 | 15% | 12.20% | 22.20% |
| $50,000 | 25% | 30.20% | 40.20% |
| $75,000 | 34% | 30.20% | 40.20% |
| $100,000 | 39% | 30.20% | 40.20% |
| $335,000 | 34% | 35.20% | 45.20% |
| $10,000,000 | 35% | 54.20% | 64.20% |
| $15,000,000 | 38% | 54.20% | 64.20% |
| $18,333,333 | 35% | 54.20% | 64.20% |
The Bernie Sanders tax plan would hit corporations hardest. Corporations currently pay a 20% flat federal tax rate. According to most estimates however, with state, local and other taxes factored in, the real corporate tax rate is actually between 15% and 38%. The rate each corporation pays depends on income brackets.
The Bernie Sanders tax changes would equate corporate income tax to personal income tax. Corporations would pay the same rate as people. That would give corporate income tax a boost of as much as 16.2%. With all additional taxes factored in, corporate income tax rates would go as high as 64% to 73%.
The table below shows corporate taxes now vs under the Bernie Sanders tax plan. The yellow line shows new corporate taxes with all state, local and other taxes factored in.
Also see: Are TurboTax Free Taxes Really Free?
Other Changes in the Bernie Sanders Tax Plan
Other Changes in the Bernie Sanders Tax Plan |
|---|
| The Bernie Sanders tax plan creates four new tax brackets above the current top bracket of $413,350. |
| Capital gains are taxed at the same rate as ordinary income under the Bernie Sanders tax plan. |
| The Bernie Sanders tax plan gets rid of the alternative minimum tax (AMT) |
| No more personal exemption phase out. |
| For income over $250,000, itemized deductions are capped at 28%. |
| The Bernie Sanders tax plan adds 6.2% healthcare tax to employers. |
| The Bernie Sanders tax plan cuts many tax breaks for gas, oil and coal companies. |
| The Bernie Sanders tax plan limits foreign tax credit for corporations. |
| Inheritances above $3.5 million are taxed as capital gains with the Bernie Sanders tax plan. (was $5.4 million) |
| The Bernie Sanders tax plan raises estate tax to 45% to 65% depending on size (was 40%) |
The table above shows the biggest changes in the Bernie Sanders tax plan. The plan would create four new tax brackets for richer Americans. Currently, very rich Americans pay the same percentage as the moderately rich. Someone making $400,000 a year pays $158,400 in federal taxes. Someone making $50 million a year pays $19.8 million.
After the Bernie Sanders tax changes, the person making $400,000 would pay the same amount as before. The person making $50 million would pay $27.1 million.
Bernie Sanders Tax Changes in Real Dollars | ||
|---|---|---|
| Income | Real Tax Now | Real Tax After Bernie Sanders Tax Changes |
| $400,000 | $158,400 | $158,400 |
| $50,000,000 | $19,800,000 | $27,100,000 |
The chart below shows the real dollar impact of the Bernie Sanders tax plan.
Other changes include removing the alternative minimum tax, capping itemized deductions and adding a 6.2% healthcare tax to employers. The Bernie Sanders tax plan would also cut out tax breaks for oil companies and limit foreign tax credits for corporations.