Bernie Sanders hasn't come out with a detailed tax plan yet, though his campaign has been working on one and will present it soon.
Very early in his campaign he commented about that long-ago 90 percent top marginal tax rate that the very rich paid during the 1950s. Those in the elite media laughed incredulously that anyone would have the gall to bring up that old thing:
Income inequality and the distribution of wealth are two topics Sanders hammers away at constantly, and during the interview with Harwood he brought up the fact that the top marginal tax rate for income during the 1950s was somewhere around 90 percent. Sanders’ comment took Harwood aback. “When you think about something like 90 percent, you don’t think that’s obviously too high?” he asked. “No,” Bernie shot back. Sanders’ endorsement of the Eisenhower-era tax structure also raised eyebrows at the New York Times, which observed that Sanders “doesn’t flinch over returning to the 90 percent personal income tax rates of the 1950s for top earners.” In these reactions you can easily spy an undercurrent of incredulity that a politician would enthusiastically advocate for rich people to pay more – much, much more – in taxes.
In addition to raising taxes on the very rich, there's an argument to be made that at the same time taxes should be LOWERED on the middle class and the poor.
Currently, if you look at total taxes, there's very little progressivity left in the tax system.
In 2014, the bottom 99 percent paid an effective rate in total of 29.5 percent while the top 1 percent paid 33.3 percent. Not much progressivity in the tax rates there.
The bottom 20 percent, with an average annual income of $14,000, paid an effective rate of total taxes of 19.1 percent.
You can see the chart breaking out the figures for the different quintiles and the top one percent here.
Part of the problem is that individuals are paying a much larger portion of the tax burden now than they used to. In the 1950s, corporations used to pay over 30 percent of federal tax revenues; now they only pay about 11 percent of them.
The other part is that a big portion of the tax burden on middle and lower income earners is payroll taxes, which are regressive rather than progressive. They're flat taxes -- meaning one rate rather than a rate that grows with income level.
Without getting into the boring weeds too much here, it seems that one big way to reduce income inequality and restore progressivity to the tax system would be to not just increase taxes on the extremely wealthy, but to lower them on middle and lower income earners at the same time.
Sanders talks about how much wealth has been transferred from the 99 percent to the 1 percent over the past three decades and how it's time to start transferring it back:
“Ninety-nine percent of all new income generated today goes to the top 1 percent. Top one-tenth of 1 percent owns as much as wealth as the bottom 90 percent. Does anybody think that that is the kind of economy this country should have? Do we think it’s moral? So to my mind, if you have seen a massive transfer of wealth from the middle class to the top one-tenth of 1 percent, you know what, we’ve got to transfer that back if we’re going to have a vibrant middle class. And you do that in a lot of ways. Certainly one way is tax policy.”
Hopefully, lowering taxes on middle and lower income earners is something he's looking at.
When a candidate talks about raising tax rates to 90 percent, it's something that can easily be twisted and used to scare voters into thinking that That means YOU.
But if he would couple that idea with a plan to actually lower the tax burden on average people, it would be a lot harder to mislead voters, and would be very popular.
You never know -- a pitch like that might really cause a campaign to catch fire.