(FinancialHealth.net) – Senator Bernie Sanders (D-VT) and Senator Elizabeth Warren (D-MA) have told the American people that they will give out a lot of free stuff if they’re elected. Free college and free healthcare are just two of their proposals.
To pay for all of the free programs, they’ve both said they’ll place a wealth tax on America’s most successful citizens. A new report says this tax will only hurt the working class.
American Action Forum (AAF) says the wealth taxes proposed will cost workers more than $1 trillion in lost earnings over a decade. To ensure accuracy, the group used the same model the nonpartisan Joint Committee on Taxation and Congressional Budget Office use when they analyze policy proposals.
If Warren becomes president and implements this wealth tax, workers will “lose more than 60 cents of earnings for every dollar of revenue raised.” Over 10 years, they would lose $1.2 trillion. Bernie’s plan will cause similar losses with an overall cost of $1.6 trillion.
The loss is a result of the gross domestic product (GDP) being reduced by the taxes. The AAF study found that during the first five years, the taxes will reduce the levels of GDP by 0.6% annually. For five years after that, the levels will shrink by 0.8% per year and 1.0% annually until the economy adjusts to the wealth taxes.
So, what does that mean in laymen’s terms?
The GDP is the value of all of the goods and services that the country produces annually. When our GDP decreases, unemployment rates go up, wages go down, investments drop because businesses want to hold onto their money, and the economy suffers. Basically, everything that we want to avoid if the working-class is to get a leg up, would happen as a result of the taxes.
That’s not good news for candidates who are running on platforms to help working-class America.
~Here’s to Your Financial Health!
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