Ah, the 1970’s an era of…um…just a second…let me look at Wikipedia, I wasn’t alive.
[Dramatic pause.]
Ah, the 70’s, an era of Nixonian politics, disco, old gas pumps at religious gas stations and weird bridges. (See the wiki photo spread to get that remark, ha).
Tell me this photo doesn’t make you play a 70’s beat in your head. Wakka chika, wakka chika.
The 1970’s also gave us Bernie Sanders as a political candidate, activist, and pundit on everything from tax policy to modern medicine. A thirtysomething Sanders ran for Vermont governor in 1972 and 1976, and for U.S. Senator in 1972 and 1974, and he also served as state party chair for the fledgling Liberty Union democratic socialist party from 1973-1975.
A treasure trove of newly scanned newspaper articles, papers and essays from the archives at the University of Vermont offer more insight into this period of Sanders’ career than we’ve ever had before. They help fill in Sanders’ history and reflect his stalwart consistency - for better and for worse.
There is so much information here that I think it warrants a full series. During this period, Sanders offered a long list of opinions and prescriptions for the state of Vermont and the nation, and with the hindsight of history we can question how some of these ideas might have panned out.
Where would they have been helpful? What were their shortcomings? And what do they say about Bernie Sanders today as a candidate, if anything?
In the interest of full disclosure, I’m what might be called a “Bernie centrist,” meaning that I don’t fall far to one side where I view him as the savior of all things, nor do I fall to the other side where I view him as an absolute negative force in our politics. Why does everything have to be so black and white all the time? In addition to being unhelpful, that’s just so booooooooring.
So I’m going to write this series from the standpoint of someone who is willing to acknowledge both strengths and weaknesses. If you can’t stomach either/or, then maybe this isn’t the diary for you.
I will refrain from overly hyperbolic lingo in either direction. I won’t call Sanders names. But Im still a sarcastic, quick-witted millennial, and my tone will reflect that. If you feel you will need smelling salts if I cross a line, grab them now. (See…case in point…if that offends you, I don’t recommend moving forward.)
Anyway, let’s move on to the topic I’ve selected for this first issue – Sen. Sanders’ tax ideas from his 1974 and 1976 runs.
LET’S GET 70’!
What’s that thing da government collects?
TAX!
And what’s that thing that Sanders talk about?
TAX!
You can see that Sanders is one bad mother..
Shut your mouth
(But I’m talkin’ about tax)
We can dig it…
Sanders ‘76: A progressive(ish) state tax plan
In 1976, quarters were weird, they had George Hamilton auditioning to be ELO’s drummer on them. Also, Bernie Sanders spearheaded writing a Vermont state tax proposal for the Liberty Union party platform. This was a period during which the state tax structure was undergoing a lot of changes – there are ample essays on this topic from the time, and many offered their ideas. The Sanders plan prescribed eliminating all use tax — sales tax, cigarettes, gas, electric, telephony*, etc. (I leap for the opportunity to use the word “telephony.”)
*On a side note, on the list of 1,000 things Bernie despised, telephone companies were pretty high up: “…the telephone company -- which is probably the single greatest rip-off company in America.” I don’t know how phones and phone accounts worked in the 70’s, so this statement reads as kinda funny.
Instead, all state taxes would be generated through a marginal rate income tax, which he set at:
annual Income |
Marginal Rate |
0-10k |
0% |
10k - 15K |
4% |
15k - 49k |
13.56% |
50k - 100k |
19% |
100k+ |
33.47%
|
It’s hard to assess this proposal based on the marginal tax rates themselves – 1976 used really different rates from today. The federal marginal tax rates were considerably higher than today, so I wonder if the overall plan would have proven cumbersome for middle class families. So I tried to calculate how this would look if in place today.
Under the Sanders plan the poor pay less and the rich pay more. In a rough (very rough) comparison of Vermont’s state and federal tax burdens between 1976 and today, I estimate the Sanders plan “tipping point” (the income level where his proposal goes from cheaper for today’s taxpayers to more expensive) as around $18,000 in 1976, or about $75,000 in income today.
In other words, if these rates were used today this plan would slightly reduce tax burdens for everyone under a $75k income and greatly increase them for everyone above that threshold. A family earning $20k in 1976 (or one earning ~$80k today) would pay a 25.5% effective tax rate with today’s tables, and 29% under the Sanders plan…that income amount being slightly above the tipping point.
This is consistent with his taxation philosophy today, and again I would not nitpick the specific marginal rates because we assume those would have fluctuated over time as state needs changed. However, there are a few major issues with the proposal that likely made it problematic, even in 1976:
1. Coupled with federal marginal tax rates of the time, the Sanders plan was calling for combined marginal tax rates on the wealthy of over 94%. Vermont has the third most progressive tax structure today, behind CA and DC. The top 20% pay 10.4% in state and local taxes…so 33.47% is a bit of a leap.
2. Tying almost ALL state revenue to income taxes could have negative consequences. California currently collects about 55% of its annual revenue from income taxes…and this creates significant swings in annual revenues depending on the overall economy. This strategy led to massive budget deficits during the great recession, and difficult choices. A state system comprised of entirely income taxes would experience thismeffect to an even greater degree, and recessions would come with plummeting state coffers. But such fluctuations could be offset through a robust “rainy day fund,” like CA uses now. That said, legislators have never really been inclined to save – and indeed, Sanders’ 1976 proposals would have spent every cent (and more) of his new tax scheme.
3. The plan also fails to recognize the secondary objectives of some taxes. Use taxes can shift costs to those who utilize specific things more than others, which can help government better allocate resources. It’s moderately popular in California to use gas taxes to fund infrastructure. (Or do we?? Check out the insane CalTrans chart for taxpayers, ha.)
And many taxes are designed to engender positive behavior. Gas and electricity taxes help promote conservation. Cigarette taxes may discourage smoking (it’s unclear), but they can raise revenues to offset the social costs of smoking. The Sanders plan would have removed Vermont’s ability to use targeted taxes for specific results.
4. But the biggest failing of the plan, I would suggest, is that an ultra-high state income tax isn’t necessarily desired by voters – a scheme like this would definitely be unpopular today (based on a pretty consistent rejection of high state income tax rates at the ballot box), and I think it was a pretty unpopular in Vermont in 1976. And in a democracy that’s kinda important.
Overall, I would rate the 1976 Vermont proposal as “so-so.” At first glance, it looks like an extraordinary tax hike for middle class families, but when we calculate out 1976 incomes and pull up the tax tables for both then and today, the Sanders’ state tax scheme is pretty in line with where middle class families ended up. But the scheme also blew upper income tax rates through the roof, and it’s not clear that would have benefitted the state in the long run.
More problematic, the shift of the tax base to an entirely income tax-driven revenue structure could have made the plan either completely unsustainable, or to a lesser degree it would have deprived government of the ability to encourage/discourage specific behaviors, or derive revenues directly from the systems they want to fund.
1974: Utilize a 100% tax rate at the top
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Two years before the Vermont tax plan, Sanders was running for the United States Senate against…Sen. Patrick Leahy? Really?? For the love of carp [sic…fish joke]. The same two dudes were fighting for the same Senate seats before I was even born? How old are these guys?? Ha.
Anyway, in his Senate bid, Sanders cited the appointment of Nelson Rockefeller as Vice President as evidence that Sen. Leahy was “controlled by monied interests.” Sanders ran on a platform that generally espoused concentrated wealth as the source of all problems in society.
His solution to this problem was not only a higher tax structure for most incomes, but an absolute, 100% tax on high incomes. In this particular campaign, he assessed the appropriate level to be about a million dollars a year. However, that was more a talking point for his idea – the actual plan was a little more complex.
Sanders suggested that the total yearly cost for a family of four be calculated out, and then some higher amount based on some sort of multiplier be identified and indexed to create his 100% tax bracket. This would lock his 100% tax rate level in at some consistent amount over average living costs. He also called for assets to be taxed, so that accumulated wealth could be “repossessed,” as he put it.
Would this plan have worked?
I’m extremely skeptical that this idea was good. And that’s a nice way of saying that this idea is, in my opinion, 1970’s claptrap college kid drivel (Sanders was 34, but whatever). I mean…I’m trying to be nice, but the proposal was a little absurd.
For one thing, while there’s a legitimate case to be made that there is an “ethical floor” for tax rates amongst the affluent (it’s wrong for them to pay too little), there is probably also an ethical ceiling (it’s also wrong to make them pay too much). I don’t know that it’s morally permissible for a liberal democracy to take everything above a certain level. Liberals today agree that taxes on the rich are far too low. But taxing the entirety of their income is a bit extreme, and I question the ethical case for it.
And it’s not clear this would have been beneficial in the long run anyway. I would think that a government abuse like this would encourage these individuals to relocate elsewhere and adopt foreign citizenships. If that sounds far-fetched – that affluent individuals would emigrate to other nations under an extreme tax, it really isn’t.
In recent years, France experimented with a less extreme variation of Sanders’ 1974 plan. In 2012, France adopted a 75% top tax rate on those earning more than $1 million euros / year, and also a 0.55% - 1.80% annual wealth tax.
This followed decades of rising tax rates in the nation. This “supertax” (incomes) and “solidarity tax” (wealth) both proved unsuccessful, and they were repealed in 2015 and 2017 respectively.
Studies show that France’s high tax policies did, indeed, encouraged French residents to relocate to other countries, mostly the U.K. and Belgium. During the period that the supertax was active, over 12,000 millionaires per year changed residency. Currently, an estimated 2.5 million French people officially reside in other countries. These aren’t all tax evaders, but the population is disproportionately affluent, wealthy, and business-owners. And other residents evaded the tax through complex agreements with their employers - accepting delayed or other forms of payment in order to remain under the margin.
So yes, if taxes exceed a certain amount the rich will leave, and revenues will fall. And while I can’t be sure, I suspect that 100% is somewhere above the level where this occurs. (Actually, I can be entirely sure, ha.)
So, while 1970’s American and modern Europe aren’t entirely comparable, I think we can side with the majority of economists, as backed up by our social experiment case studies on this, and say that a 100% tax rate was a bad idea.
Bernie Sanders - different era, same drum
Reading through pages and pages of this information, Sanders has retained pretty remarkable consistency in how he views tax policy for a bazillion years. Agree or disagree, he’s been working to convince people that the rich need to pay higher taxes for his entire career, and he’s been framing those arguments in more or less the exact same language.
Some of his specifics seem like they wouldn’t work today...and from what I understand of the economic environment of the period, they may have been problematic at the time too. But with history as hindsight, I think that most liberals would concur that even if his specific tax rates weren’t perfectly conceived, he did demonstrate a certain adeptness at identifying things that needed to change. I have to consider that it might have been better to try a 100% tax rate on the rich and find that we needed to adjust downward than to have tried the absurdly low rates the GOP used to create our national debt and ongoing deficits
What this says about Sanders more broadly
In his essays on tax policies from this era, we see a younger Bernie Sanders who is...kinda not that different, honestly. He’s angry. He’s determined. He’s rude at times. And he’s prone to throwing out grand ideas that aren’t always as fully fleshed out as they seem like they should be. And at times, he’s a bit wacky.
Some will suggest that Bernie’s history says “everything” about him and his candidacy today, while others will say that proposals and essays from 40 years ago are pretty meaningless. I fall somewhere in the center on this.
The 1970’s was a very different world from today (I assume, mostly I base this perception on All the President’s Men, Sigmund and the Sea Monsters, and the discography of Abba, which inform most of what I know about the era). If we are going to judge Sanders on what he wrote back then, I think the context of the era matters – it was a time when the hippie and yippe movements were marching forward, and a lot of ideas were being thrown around concerning how society should evolve, so the fact that Sanders espoused some odd ideas isn’t surprising or particularly notable.
At the same time, we see many of the same philosophies, strategies and behaviors that we see in modern Bernie, and some are troubling. In his tax policy approach, sure, we see that he’s been consistently a progressive. But we also see a general arc to how he approaches things:
1. He will identify a legitimate social issue and raise legitimate concerns, i.e. growing wealth and income inequality. He was right - these were emerging as vital concerns.
2. He will identify and blame a small subset of individuals and organizations as the cause. Sanders’ “villains” are always those he’s predisposed to dislike. Millionaires…telephone companies…even mean school teachers. If Sanders is inclined to dislike someone, then he’ll frame a case that it’s their fault that society has problems. Those mean teachers? They’re causing cancer. No...seriously...stay tuned for my issue on healthcare, ha.
3. He crafts a solution that places the onus for fixing the identified problems entirely on those he blames. There’s rarely shared responsibility – his solution is to take from those he dislikes in order to get the things he wants.
4. His solutions, regardless of their hyperboloc origins, usually have some merit. But they’re imperfect, as solutions for complex problems offered by any one person tend to be. But Sanders never sees his solutions as open for debate, and he will entrench himself and refuse to compromise. While this makes him consistent, his inflexibility cements the flaws in his ideas into place.
5. When others point to shortcomings in his proposals and suggest changes, he castigates them as beholden to his cited “rogues gallery.” When Sen. Leahy rejected the 100% tax in 1974, Sanders accused him of being on the dole to the same shadowy, unnamed puppetmasters that he cites 32 years later in his presidential bid. You either agree with him entirely, or you’re corrupt.
And this castigation applies to eeeeeeeeeveryone who dissents in any way. In a later issue, I’ll discuss Sanders’ healthcare views, but in a 1969 essay he lectures to his detractors, “[My position] in no uncertain terms, state that you [those who disagree] may very well be the cause of cancer.” Disagree with Bernie, and cancer is your fault. Sigh. 🙄
This is sorta how debate with Bernie Sanders goes...every time...in any era. It’s weird to read articles from 1974 and feel like they were written two years ago. Same strengths...same weaknesses.
This is, to me, an issue.
What I’m seeing is that with Sen. Bernie Sanders we always go down the same path and end up in the same place – big problems, a set of villains, inflexible solutions, he’s the hero who can fix everything, and everyone who gets in his way is bad. Period...no debate...full stop...with us or against us.
And the thing is…I’m not even sure that this headstrong, close-minded stubbornness is a bad thing in a leader. In collective activism, these traits are often necessary for real, lasting change. It might be appropriate for a president to push his agenda in this manner...perhaps even effective. Maybe we need Bernie to push his imperfect solutions until something breaks…then we get change, and fix the problems resulting from his imperfect ideas down the road.
So I’m open to his stubbornness. But in reading these old essays, what bothers me is that Sen Sanders has consistently been inconsiderate of what the voters actually want.
In a democracy, mandates matter. We are not entitled to a 100% marginal tax rate if the voters don’t support it - we have to earn policies by convincing our fellow citizens that this is what we want to try together. But the Bernie of the 70’s, just like Bernie today, doesn’t want to win over a majority of voters – he wants to be in a position of power where he can make the calls regardless what the voters want. This message resonates loudly in his writings - “Don’t believe me? Then you are the problem, and you need to stand aside.” Over and over this is the attitude in his op-eds, interviews and essays.
That’s troubling to me, and I’m not sure what the word for that behavior is. He sees legitimate problems, and wants to help fix them out of a sense of duty and honor, but the way he goes about things shows a general disdain for others, as does his inflexibility.
But I wouldn’t suggest that this inclination is disqualifying. It’s just one flaw that’s part of what makes him a flawed candidate, just as any candidate will inevitably have flaws. Bill Clinton had an opposite temperament to Sanders in many regards, and was inclined to compromise and negotiation, and the outcomes of Clinton’s legacy...criminal justice reform, welfare reform... weren’t perfect either. Clinton’s flawed compromising nature produced its own imperfect results.
Being absolutely unyielding and being absolutely compromising seem to both lead to mixed result outcomes, so maybe that’s just the nature of how laws and the human condition mesh. Maybe it’s not so much that our leaders are imperfect, but that imperfect laws passed to govern imperfect populations in an imperfect world are prone to...well...imperfections.
At the end of the day, in thinking about the historical recommendations that Sen. Sanders made as he launched his career way back when, I have to say that while they were imperfect, they might have put us on a better path in many regards.
I don’t like the attitude used back then to convey the ideas, and I don’t think Sen. Sanders is a very nice person. (I mean, seriously...go sift through the archive...he’s not a very nice guy.) But just because an idea is expressed in an incendiary manner from a less than cordial person doesn’t always mean the idea is bad.
So what did I learn reading through this archive and stepping back in time to the 70’s for a bit?
I’m not sure. I’ve rewitten this conclusion eight times, and it just never feels right. I expected Sanders’ 70’s tax ideas to be wacky...and in some regards they are, but in others they seem pretty feasible. I like his policy proposals more than I thought I would. At the same time, I expected a younger Bernie to be kinder and gentler...but if I’m being honest, I find young Bernie to be, well, quite annoying. Maybe it’s a generational thing, or maybe it was the era, but the younger Bernie Sanders isn’t as nice as I thought he’d be. He was pretty abrasive.
So thus far, I’d say that my view of Sanders policy ideas and political values has improved a bit, but at the expense of appreciating his tempement and demeanor a bit less. I was surprised, because I really expected the opposite to be true. I’ll see if this holds up as I wade into the other issues written about in this archive, which really is a fascinating look back in time.
Next time
Bernie takes on big oil, big energy and OPEC, in an era rife with energy crises and uncertainty.
I’m totally buying a brown and orange plaid leisure suit for that issue. Hmm. 1973? Brown and orange plaid leisure suits? Am I era-appropriate, or too early for that?
Take us out, Sigmund…
(In retrospect, I feel like Sigmund may actually just be a short human in a costume made of inexpensive arts and crafts supplies.)