Democrats chasing the party’s 2020 presidential nomination have pledged to pass a far-left agenda with prohibitively expensive programs that simply soaking the rich cannot possibly pay for.
While Democrats on the campaign trail push proposals for single-payer health care, a Green New Deal, a “universal basic income,” socialized higher education, and reparations for slavery, few admit the fact that middle class taxes would have to go up massively to pay for any of this.
Massachusetts Sen. Elizabeth Warren famously dodged the question multiple times in October’s primary debate, later releasing a plan on how to fund “Medicare for All” that she says does not include higher taxes on the middle class. Budget experts have concluded, however, that paying for Medicare for All alone would require a large middle-class tax hike, and any person who says otherwise is either lying or out of touch with reality.
A new study from the Heritage Foundation released Monday offers a glimpse into what tax rates could look like if any one of the Democratic candidates were to capture the White House next fall. Simply put: they will be a lot higher.
Adam Michel, a senior policy analyst at the conservative foundation, used data from the Organisation for Economic Cooperation and Development (OECD) to compare similar taxpayers in the United States and Europe. Michel found that a lower-income European making $40,000 a year pays $6,000 more in taxes than a similar taxpayer in the United States.
A single worker earning $40,000 a year in Europe pays an average 43.8 percent of his income in taxes and is left with only $22,467 in take-home pay, according to the report. In contrast, a similar worker in the United States pays an average tax rate of 28.5 percent and is left with $28,352 in take-home pay, about $6,000 more.
Upper-middle-class workers in Europe also pay far more than their American counterparts do in exchange for more government programs. Michel found that a high-income worker in Europe earning $100,000 pays $16,000 more in taxes than an American making the same salary.
High-income earners in the United States making $100,000 a year pay an average of $35,469 in taxes, leaving them with $64,504 of after-tax income per year, whereas a European at the same pay rate gives up an average of $51,708 in taxes, leaving him with $48,292 in take-home pay, a tax rate of 52 percent in which the government confiscates more than half their paychecks.
All this, and European welfare states are still heavily indebted and heading towards bankruptcy, like the rest of the West, because even their far higher tax rates cannot generate the revenue necessary to pay for big government.
As Democrats on the campaign trail continue to push for a European welfare state, Americans should expect to see European tax rates. It is mathematically impossible to fund the left’s laundry list of proposals solely by raising taxes on America’s wealthy.
Another Heritage study authored by senior economist David Burton found that “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.” In other words, even when low-balling the costs of socialist programs, the government cannot possibly finance them by only taxing the wealthy. After taking every single dollar rich Americans have, half these Democrat proposals would still be unfunded.
“The reality is that progressive promises can only be funded by radical tax increases on the middle class, a dramatic increase in annual federal deficits and the national debt, or a combination of the two,” Burton wrote. As the European example shows, even then countries can’t pay their bills in full on time.