Buzz
Throughout his presidential campaign, Bernie Sanders has been vocal about his intentions to eliminate student debt, offer universal healthcare, and combat climate change. However, critics and other candidates have frequently questioned how he plans to finance such bold proposals. This week, Sanders' campaign revealed a budget designed to support his policy initiatives.
Here’s a brief overview of Sanders' goals and the strategies he intends to use to fund them.
Make college tuition-free and eliminate student loans
The Proposal:
Offer tuition-free education at trade schools, two-year colleges, and four-year universities through the College for All Act.
Cancel the $1.6 trillion in existing student loan debt.
Set the maximum student loan interest rate at 1.88% going forward.
Estimated Cost: $2.2 trillion
Funding Strategy: Implement a Wall Street speculation tax expected to generate $2.4 trillion over the next decade. This would involve a 0.5% tax on stock trades, 0.1% on bond trades, and a 0.005% fee on derivatives transactions.
Provide Medicare for All
The Proposal:
Establish a nationwide health insurance system to provide all Americans with free healthcare, including dental, hearing, vision, and long-term care services.
Limit individual prescription drug costs to $200 annually.
Estimated Cost: $47.5 trillion. The first $30 trillion would be covered by existing federal, state, and local government expenditures, with the remaining $17.5 trillion sourced from new revenue.
Funding Strategy:
Several methods are proposed to generate the required revenue. Below are just a few examples:
Introducing a 4% income-based premium for employees, with the first $29,000 in income for a family of four being exempted.
Implementing a 7.5% income-based premium for employers, with the first $1 million in payroll exempted to support small businesses.
Increasing the top marginal income tax rate to 52% on earnings above $10 million.
Replacing the cap on state and local tax deductions with an overall $50,000 limit on all itemized deductions for married couples.
Taxing capital gains at the same rates as income earned from wages.
Utilizing $350 billion of the funds generated from the wealth tax
Enhance Social Security
The Proposal:
Ensure that Social Security can continue to provide benefits to qualified Americans for the next 52 years.
Increase benefits, including a $1,300 annual raise for seniors earning $16,000 or less.
Estimated Cost: At least $2.9 trillion (using the current Social Security surplus)
Funding Strategy: Apply the Social Security tax to income exceeding $250,000. (Currently, the tax only applies to income up to about $138,000. Under Sanders' plan, earnings between $138,000 and $250,000 would be exempt.)
Launch the Green New Deal
The Proposal:
Transition the energy infrastructure from fossil fuels to renewable sources.
Create 20 million new jobs in the energy sector.
Estimated Cost: $16.3 trillion
Funding Strategy:
$3.085 trillion: End subsidies for the fossil fuel sector.
$6.4 trillion: Generate revenue from selling energy produced by the regional Power Marketing Administrations (effectively, the government sells hydropower).
$1.215 trillion: Cut defense spending.
$2.3 trillion: Collect income taxes from the 20 million new jobs created.
$1.31 trillion: Save on government assistance spending due to new job opportunities.
$2 trillion: Tax large corporations.
Impose a wealth tax
Many of Sanders' proposals, including Medicare for All, rely on introducing a tax on “extreme” wealth, structured as follows:
Impose a 1% tax on net worth exceeding $16 million for individuals ($32 million for couples).
Gradually raise the tax rate based on net worth, with the highest rate being 8% for net worth surpassing $5 billion for individuals ($10 billion for couples).
The extreme wealth tax is expected to generate $4.35 trillion over the next decade, as per the campaign's projections. These funds will be allocated to the following initiatives:
Affordable housing
The Proposal:
Construct almost 10 million affordable housing units.
Establish a nationwide rent control standard.
Eliminate the waiting lists for Section 8 housing vouchers.
Renovate existing public housing and build new units.
Estimated Cost: $2.5 trillion over 10 years
Medical debt
The Proposal:
Cancel all outstanding medical debt.
Remove means-testing for bankruptcy filings and simplify the process to discharge medical debt in bankruptcy.
Eliminate medical debt from credit reports.
Estimated Cost: $81 billion
Universal childcare
The Proposal:
Offer childcare services for children up to age 3, available for at least 10 hours per day.
Establish minimum wage standards for childcare providers.
Ensure free full-day pre-kindergarten education starting at age 3.
Provide free meals for all children in childcare or pre-k programs.
Estimated Cost: $1.5 trillion over 10 years
