Sen. Bernie Sanders, a self-described socialist, called for a progressive estate tax on multi-millionaires and billionaires during a speech on Saturday.
“A nation will not survive morally or economically when so few have so much while so many have so little,” Mr. Sanders said at the Vermont AFL-CIO annual convention.
“We need a tax system which asks the billionaire class to pay its fair share of taxes and which reduces the obscene degree of wealth inequality in America,” said Mr. Sanders, an independent who caucuses with the Democrats.
According to Mr. Sanders, taxing the top .25 percent of wealthiest Americans is the fairest way to reduce wealth inequality, lower the $17 trillion national debt and pay for investments in infrastructure, education and other neglected national priorities.
Mr. Sanders’ proposal would not raise taxes for the remaining 99.75 percent of Americans.
Former U.S. Department of Labor Secretary Robert B. Reich said America “is creating an aristocracy of wealth populated by heirs who don’t have to work for a living yet have great influence over how the nation’s productive assets are deployed,” and called Mr. Sanders’ tax proposal “a welcome step toward reversing this trend.”
But according to a study conducted by the American Enterprise Institute, raising taxes on the wealthy is not as effective as cutting spending to reduce national debt and make up budget gaps.
Researchers examined 21 Organizations for Economic Cooperation and Development countries between 1970 and 2007 and found that countries with successful fiscal reforms, on average, closed 85 percent of budget gaps with spending cuts, while countries that relied at least 50 percent on tax increases saw failed fiscal reforms.