Correction: He is raising taxes on families making anything over $0.
How does anyone think the 7.5% premium on employers will be paid? Through wage cuts of 7.5% is how. And most people, unfortunately due to the dumbed down K-12 system, won’t get it that their employer should’ve cut their salary by just 6.98% to make it break-even.
In the short run the employers would just “eat it” on the 7.5% premium. However by the time such legislation could get through Congress, signed into law, and regulations go out to implement - we’re looking at January 2022 as the earliest it could take effect. Starting November 2020 (if he becomes President-Elect) we’ll see employers planning ahead on how to handle the impact and well before January 2022 this 7% cut in 2022 pay will be start being implemented. It’ll come in smaller or no raises at all. It’ll come in smaller bonuses or tightened rules. It’ll come in less employees being hired. It’ll come in pay cuts.
As for the gray economy is concerned - its going to be a BOOM time. Currently it costs 12.4% for Social Security, 2.9% for Medicare, and even more than that for Middle/Upper wage workers. This Sanders plan will raise that this to 19.9% for every penny and then about 47.9% for middle imncomes with higher incomes having an even higher effective tax rate. Why will people continue to hire legal residents/citizens when they can just hire people under the table (some legal, some illegal) to do many jobs like agriculture, construction, nails/cosmetics/hair, deliveries, and a lot more? I expect to see more cash-based businesses growing in America if Sanders is elected President.
Correction: 22.8% on all wages; not 19.9%
2.9% Medicare + 12.4% Social Security + 7.5% Sanders Care
Every penny of wages taxed at a floor of 22.8%.
Of course at the super rich level of 10 million its 52%.
However that 52% level can always trickle down to much lower wage levels. Look what happened to the original Income Tax of 115 years ago that was 2% on incomes over 5K (or 130K+ in today’s dollars). Any of the “super rich” having such a tax rate level?