Bernie Sanders' deceptive tax numbers

News stories say some posted on Facebook that Bernie Sanders proposed a 52% tax rate on all income over $29,000. The posts went viral. The assertion is false, so many in the mainstream media pounced. Yet Google News search results for {Bernie Sanders 52% tax $29,000} show significant  media bias. Defending Sanders far outweighs any critical analysis of his proposals. BS proposes to pay for his spending spree here.

The Facebook posters conflated two things. The truth is BS wants a payroll tax of 4% of income over $29,000 and an income tax of 52% of income over $10 million. He also wants to increase the Social Security payroll tax rate 6.2% on income over $250,000 (the smaller maximum wage base more accurately and the rate is now 0%). Adding them makes a tax rate of 62.2% of income over $10 million. None of the media stories I read reported the 62.2% or even 56% (= 52% + 4%).  (For Schedule C income it may be more, 68.4%, since the person must also pay the employer's 6.2% Social Security payroll tax. On the other hand, it may be somewhat less due to the qualified business income deduction.) Most also gloss over the other income tax hikes Sanders proposes on incomes much lower than $10 million, starting at 40% on income over $250,000 (link), which the first Sanders link above even omits.

The marginal income tax rate at $250,000 for married filing jointly is 24%; for a single it is 35%. So BS proposes a 16% tax rate increase for married filing jointly; 5% for single.

Regarding his proposed tax of 4% over $29,000 to pay for Medicare For All, the first link says: "In 2018, the typical working family paid an average of $6,015 in premiums to private health insurance companies.  Under this option, a typical family of four earning $60,000, would pay a 4 percent income-based premium to fund Medicare for All on income above $29,000 – just $1,240 a year – saving that family $4,775 a year.  Families of four making less than $29,000 a year would not pay this premium."

If the current 1.45% payroll tax for Medicare isn't eliminated, then BS sweeps it under the rug. Also, the picture is quite different for an income of $250,000, which is middle class in some places (e.g., Silicon Valley, NYC). 4% * ($250,000 - $29,000) = $8,840. So there is more tax and likely no savings for them! Even for a $200,000 income 4% * ($200,000 - $29,000) = $6,840, which is still more tax and likely no savings.

To fund the Green New Deal he proposes "collecting $2.3 trillion in new income tax revenue from the 20 million new jobs created by the plan." He says nothing about how many jobs his plan would eliminate. The number of unemployed people in the U.S. last month was only 5.89 million! So that implies eliminating several million jobs. The $2.3 trillion, which is very likely for 10 years, looks inflated in two ways -- number of jobs and tax rate. 20 million * $60,000 * 0.20 tax rate * 10 years = $2.4 trillion. For an income of $60,000, the average effective income tax rate is only about 10%. So the $2.3 trillion appears to be several times a realistic number.

World Bank's pandemic bonds

The World Bank issued the bonds in 2017. They mature in July, 2020. Their value has dropped sharply recently with the news about the coronavirus. Reuters.  Wall Street Journal (paywalled).

Sanders' and Warren's lack of sacrifice

Forbes: Senators Sanders And Warren Strongly Endorse The Benefits Of Private Jet Travel

I don't believe Sanders or Warren is sacrificing or inconveniencing themselves enough. Why are they riding in private jets when commercial flights are available? The Forbes article says they buy carbon offsets, but the payment is probably from campaign funds that other people have contributed, not Sanders' or Warren's personal money. They also preach aplenty about "saving the planet" and against carbon dioxide emissions. Shouldn't they make a greater effort to practice what they preach? Or are they simply taking advantage of their elitist status, which we in the unwashed masses aren't entitled to?

I believe the comparison to CEOs taking private jets is weak. That was 12 years ago when the climate doomsayer talk wasn't so loud, and the CEOs weren't preaching doom.

I plan to make three round trip flights this year. The fares will be paid from my own pocket and the only private jet I have ever used is in my name. 😇

Bernie Sanders is being greedy and stingy with all the campaign money he has amassed, too. Why doesn't he redistribute the wealth to his more needy campaign rival Amy Klobuchar? 😉

ProPublica never satisfied

The IRS and providers of free software for filing income taxes recently signed a new agreement that is hoped will increase usage of said free software on the IRS's Free File website. I wrote about it here February 9.

ProPublica is still not satisfied and continues its smear campaign against Intuit, maker of TurboTax, with this article. As usual it has plenty of deception, half-truth, and use of double standards. As usual the IRS or non-savvy people hoping to file for free bear no responsibility for what ProPublica feels is unjust. All blame goes to the software providers, especially Intuit and TurboTax.

Before saying more about the article and to clarify, there are two free versions of TurboTax. The "Free File" version is the one accessed via the IRS's Free File website, which also hosts several competitor products. The "Free Edition" version is not part of the IRS's Free File program. If somebody tries the former and discovers they fail to qualify, they will not be offered a pay version of TurboTax. They will be directed back to the IRS Free File website to start all over again with a different product. If somebody tries the latter and discovers they fail to qualify, they will be offered a pay version of TurboTax capable of handling their situation.

The following are some assertions in the article and my comments about them.

1. "Intuit does not advertise its Free File offering on Google."

Why does ProPublica feel Intuit should pay to advertise something that will produce no revenues for Intuit? The IRS gets the tax revenue, so why shouldn't the IRS pay for all advertising of the Free File program? Why does ProPublica believe Intuit should pay to advertise a website that hosts several products that compete with TurboTax? Furnishing the software costs Intuit time and money, and some people get to use it for free. Why is ProPublica so ungrateful and mean-spirited?

2. "Google searches for 'free tax filing' and other similar phrases still yield ads for a plethora of products such as TurboTax’s 'Free Edition'. ... TurboTax’s version of Free File — the one that doesn’t charge customers anything — typically won’t appear until the second page of search results.”

The Free Edition doesn't charge customers either. Anway, so what? If a person searches for "free tax filing," shouldn't he or she be informed that TurboTax’s Free Edition exists? Or is ProPublica out to prohibit Intuit from advertising? When is ProPublica going to try to prohibit the IRS from advertising its Free File program?

3. "Intuit places its ads strategically in searches for “IRS” and “free file,” among thousands of related search terms."

This baffles me. What is the author's point? Anyway, I did that search. The first non-ad search result was www.irs.gov › filing › free-file-do-your-federal-taxes-for-free. So Intuit is not making it difficult to find the IRS Free File website. The first non-ad search result shown in the screenshot in ProPublica's article is to https://apps.irs.gov/app/freeFile/. So again Intuit is not making it difficult to find the IRS Free File website. Where's the beef?

Additional comments

Nowhere in this article does ProPublica tell readers how to find the IRS's Free File website, which is where you will go if you click on the link in that first non-ad search result.

Again ProPublica doesn't complain about a person not passing the criteria to use the Free File version and later finding "a dead-end street" after wasting a lot of time entering data. However, ProPublica loudly protests somebody not passing the criteria to use the Free Edition version and not "finding a dead-end street" since they can switch to a pay version.

Using the IRS's Free File link, the second option says "Income above $69,000" & "Free File Fillable Forms."  Is a person required to have income above $69,000 in order to use said forms? No, but ProPublica hasn't accused the IRS of false advertising.

Addenda 2/23/2020

Justin Elliot has led ProPublica's smear campaign against Intuit, maker of TurboTax. He got this article published by HuffPost. The title, 'Congress Is About To Ban the Government From Offering Free Online Tax Filing. Thank TurboTax.' is both misleading and false. The IRS already offers 11 ways to file free online now, and Congress isn't trying to eliminate them. There are 10 software options in the Free File program. The 11th is the IRS's own Free File Fillable Forms. As said above, a person is not required to have income above $69,000 in order to use said forms.

Again Elliot fails to mention VITA,TCE, and AARP, which prepare millions of tax returns for free and online.

Barbs about Astros' sign stealing

The Houston Astros have been accused of stealing signs from opposing teams. The stealing is mainly to find out what sort of pitch is coming next to an Astros batter. The methods aren't traditional, including banging on garbage cans, and there have been a lot of comments made about it. This story from the Associated Press includes some amusing barbs about it and Astros star player Jose Altuve's partial tattoo.

Today's print edition of the Cleveland Plain Dealer had much the same article but a different title -- Sign stealers have rights, too, you know. 😊

Here is a Plain Dealer article dated last month about the scandal that draws a fine line between cheating and gamesmanship in baseball. It includes humor, too.

Why You Shouldn’t Be A Socialist #3

The author devotes a chapter to critics of socialism with ‘Why Opponents of Socialism Are All Wrong’ as part of the title.

One criticism is that socialists always deny that socialist governments are “true socialism.” Ironically, that’s what Robinson does. Referring to critics using Venezuela to discredit socialism, Robinson denies Venezuela is a case of “true socialism.” He dismisses North Korea being called socialist simply because it isn’t democratic (245). So does he believe North Korea is capitalist? Heh. He chides others who treat socialism as synonymous with the Soviet Union for being selective in their presentation of history. Yet he is very selective about what he considers “true socialism.” “The socialist left has a great heritage, both in the United States and everywhere else.” “To be a socialist is to take part in a tradition that is intelligent, humane and honorable” (162). An even blacker pot calls the kettle black.

While most socialists are advocates of government control of the economy, Robinson tries to “sweep it under the rug” by saying there are a few socialists who “loathe the government.” This tactic is quite ironic. He calls himself a libertarian socialist, yet several times he says the left needs more political power and better organization. He also strongly endorses Bernie Sanders, an advocate of much more government power and putting chains on private sector businesses. By the way, Bernie Sanders calls himself a Democratic Socialist, but more accurately he is a fascist. Like described here fascism permits some private ownership of the means of production, but subject to extensive controls by government: "As an economic system, fascism is socialism with a capitalist veneer." "Under fascism, the state, through official cartels, controlled all aspects of manufacturing, commerce, finance, and agriculture. Planning boards set product lines, production levels, prices, wages, working conditions, and the size of firms." State control is paramount. This captures Sanders’ proposal for health insurance. He wants to eliminate private health insurance by the U.S. federal government taking over all health insurance, like Josef Stalin took over agriculture in the Soviet Union. More recently he has advocated government takeover of electrical power producers.

Robinson’s praise of socialism is based mostly on wishful thinking inspired by moral outrage. He gives no realistic causal mechanism of how socialism will work in practice. His “theory” boils down to:
- dreaming of utopias,
- moral outrage,
- lecturing by a self-appointed moral authority,
- nobody will need to work at an unpleasant job, e.g. garbageman or roofer (my opinion), or due to a boss, or a boring job, but somehow the work will get done anyway,
- nobody will be poor regardless of whatever else they do or don’t do,
- lots of “free stuff” paid for by others, expropriated,
- who produces what, how, where, and how much of a large, ever-changing, wide variety of goods and services in a society of millions of people with dispersed, yet localized, knowledge is no concern to Robinson. It will happen just fine; no causal explanation needed.

The End

Edit (2/17):

I tried to put a book review of Why You Should Be a Socialist on Amazon and met a barrier that was new to me.

"We apologize but this account has not met the minimum eligibility requirements to write a review. If you would like to learn more about our eligibility requirements, please see our community guidelines." The guidelines say to post a review you must have spent at least $50 on Amazon.com in the past 12 months. I did spend more than $50 in the past 12 months. However, part was with a gift card, and my net spent was less than $50. 🙂

Why You Shouldn’t Be A Socialist #2

Robinson misunderstands limited liability. A key feature of incorporation is that non-employee stockholders have limited liability for actions made by employees. Why should the former, who have minimal control on how the corporation is run, be held personally responsible -- beyond the worth of their stock -- for the actions done wholly by others, employees? Even trying to make them responsible is a big conundrum. The ownership of publicly-traded stocks of big companies is ever-changing. (If non-employee stockholders are personally responsible, then why not lenders, too?)

Robinson abuses the concept of marginal utility. It was developed to explain an individual’s valuation, not different valuations by different persons like he does. He shows no understanding of marginal utility’s importance to market prices or the division of labor.

All but one of his “explanations” of why opponents of socialism are wrong (Chapter 12) are weak or wrong. His response to one alleged criticism of socialism -- that socialists are boring and humorless -- isn’t worth further comment.

He says critics say socialists dislike freedom, but he says “Democratic socialists believe deeply in freedom.” He adds, “capitalism actually restricts people’s freedom. We believe that the choices capitalism gives people -- obey your employer or starve to death -- are not really choices at all “ (234). Huh? They can’t seek a different job, become self-employed (be their own boss), find free food from a charity, or sponge off relatives or socialist friends? He characterizes “free market freedom” as “the freedom to die when your medical bill exceeds your paycheck” (245). Oh my, so simplistic and so wrong.

One “freedom” that Robinson doesn’t mention is that many socialists approve of is a government free to use coercion and bullying against other people they dislike. The freedoms and rights of people they dislike matter little or none to them. When they decide who gets elected, that’s the road to democratic mobocracy, or as Karl Marx said it, the dictatorship of the proletariat.

To be continued.