Dipto Islam, March 4, 2016
Bernie Sanders has been accused of selling promises. Hillary Clinton repeatedly asserts that Sanders is “promising more than he can deliver.” His policy proposals have been criticized as nothing but promises that add up to naught and funding them would not be possible. In response, Sanders dismissed those accusations and assertions boldly to Face the Nation moderator John Dickerson. He defended his policy proposals claiming that the “numbers add up perfectly”, but to implement them will take “guts.”
“The numbers add up perfectly. The issue is — do we have the guts to take on the wealthy and the powerful in corporate America, who today have so much wealth and so much power?”
Sanders’ policy proposal includes tuition-free colleges and universities which he wants to fund by imposing tax on Wall Street speculation. Referring to his proposal of tuition-free colleges and universities, Sanders explained, “That’s not a radical idea, it exists in Germany [and] in Scandinavia. ….. But it does require us to take on Wall Street and impose a tax on speculation.”
His proposal of infrastructure improvement could be funded through the closing of offshore tax havens. Massive infrastructure improvement plan will both provide better roadways and bridges as well as create good-paying jobs. Referring to his proposal for rebuilding crumbling infrastructure, Sanders said, “If we talk about creating 13 million jobs rebuilding our crumbling infrastructure, it does require us to come up with a trillion dollars by ending this outrageous loophole such that corporations can put their money in the Cayman Islands and Bermuda and other tax havens, not pay a nickel in taxes,” Sanders said.
Sanders stressed the need of tighter regulation on tax loopholes that allow corporations to avoid or even evade paying taxes and traffic those tax savings into offshore tax heavens. Tighter regulation will increase tax revenue which he proposes to invest in infrastructure and public welfare.
A study conducted in 2015 revealed that at least 15 major Fortune 500 companies paid zero taxes on $23 billion worth of profit in 2014 and almost paid no federal income tax on $107 billion over the past five years. Some companies actually received a rebate. Corporations often use accelerated depreciation loophole to avoid tax. Tighter regulation on depreciation loophole alone would raise more than $428 billion for the government over a decade, the study finds.
Corporations are given extra-ordinary concessions to avoid tax unfairly and those tax savings to the corporations goes to offshore tax heavens. Do American citizens get any benefit from those tax savings and their eventual reinvestment in foreign lands? Undoubtedly the answer is no. Then why do the corporations get those concessions? Definitely that is because they also provide concessions to those in power. This is a “give and take game” to the disadvantage of the US citizens.
On such lavish tax avoidance, Sanders said, “At a time when we have massive wealth and income inequality, and when corporate profits are soaring, it is an outrage that many large, profitable corporations not only paid nothing in federal income taxes last year, but actually received a rebate from the IRS last year.”
There are loads of assertions that Sanders’ such plan of tighter regulation of tax loopholes is impractical. Is it really impractical? Definitely not because lot other countries adopted such measures which provided their governments enough fund to finance extensive public expenditure schemes. Then, what is holding the US back from tightening tax regulations to control those loopholes? Understandably, it is the same “give and take game.”
“The Sanders spending program is a significant stimulus to an economy that continues to underperform,” wrote Professor Gerald Friedman, who prepared a report for the Sanders campaign. “These programs will increase economic growth and employment, reduce poverty and inequality, and balance the federal budget.”
“Like the New Deal of the 1930s, Senator Sanders’ program is designed to do more than merely increase economic activity: the expenditure, regulatory, and tax programs will increase economic activity and employment, and promote a more just prosperity.”
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