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Bernie Sanders has come a long way from the underdog position he held in 2016. The Vermont senator is the frontrunner in Democratic 2020 primary polls, appearing on popular talk shows, adding celebrities and major unions to his list of endorsers, and is credited with paving the way for younger Democratic Socialists like Alexandria Ocasio-Cortez and Rashida Tlaib. Modern Monetary Theory, the controversial economic theory espoused by his senior economic adviser Stephanie Kelton, has also gained supporters since the last time Sanders ran.
It’s possible Sanders will not win the Democratic primaries this time either, but the 78-year-old’s name has become synonymous in the U.S. with a movement on the left that has energized scores of progressive young people and dramatically altered how many Americans see their lives and government policy interacting.
Which is why Sanders’ economic agenda deserves attention. Critics who don’t “feel the bern” can no longer dismiss him as an angry “communist” with no understanding of American values. His platform has already made mainstream ideas like Medicare-for-All and will no doubt be used by future leaders hoping to take it forward.
21st Century Economic Bill of Rights
Sanders says every person in the U.S. is entitled to a decent job and a living wage, quality health care, a complete education, affordable housing, a clean environment and a secure retirement. “This is the richest country on Earth and we have 40 million in poverty, 34 million with no health insurance and half our people living paycheck to paycheck,” he wrote on Twitter. “I refuse to accept that as normal.”
He has called for a 21st Century Economic Bill of Rights, referencing the first 10 amendments to the U.S. constitution guaranteeing civil rights and liberties. Interestingly, President Franklin D. Roosevelt proposed a second Bill of Rights focused on economic security after his 1944 State of the Union speech. Sanders called it “one of the most important speeches ever made by a president” in 2015 and added that “it has not gotten the attention that it deserves.”
Here we break down the key elements of his plan to deliver these rights to the American people.
Health Care a Right, Not Privilege
At the center of Sanders’ campaign is his proposal to give every American health insurance under a government single-payer system. Sanders also wants to lower the price of prescription drugs with three different bills that would allow the government to negotiate prices with Big Pharma, allow patients to import drugs from overseas and peg prices to the median drug price in Canada, the U.K., France, Germany and Japan, respectively.
About 30 million Americans are currently uninsured, and as Sanders correctly points out, the U.S. spends a much higher amount each year on health care than most major countries, as demonstrated in the chart below.
Cancel Student and Medical Debt
Sanders wants to cancel the $1.6 trillion in student debt held by 45 million people. He says this would give graduates the freedom to pursue careers of their choice, narrow the racial wealth divide and boost the economy by $1 trillion over the next 10 years. The $1 trillion figure comes from a paper written by a group of academics including Kelton.
In a speech, he also said he wants to cancel all medical debt. His proposal isn’t ready yet, but Sanders’ campaign told CNN it would eliminate an estimated $81 billion in medical debt and reform a 2005 federal bankruptcy law.
Sanders, not known for his subtlety, also wants to guarantee higher education as a right for all and would pay for this and canceling student debt by taxing “Wall Street gambling.” (See “Taxes” section)
Besides raising the federal minimum wage to at least $15 an hour and doubling union membership during his first term in office, Sanders wants to enact a federal jobs guarantee and work toward a full-employment economy. A job guarantee is actually a proposal borrowed from Modern Monetary Theory.
Sanders has said he would be an “Organizer in Chief” so it’s worth mentioning that his Workplace Democracy Plan to reform labor laws and strengthen unions is perhaps one of his most detailed so far and includes multiple measures. If the concerned bill is passed, the National Labor Relations Board (NLRB) would certify unions that receive the consent of the majority of eligible workers. Employers would be required to begin negotiating a first union contract within 10 days of the request and those that refuse would face penalties. Sanders wants to also ban mandatory arbitration, non-compete and unilateral modification clauses in employment contracts and establish a sectoral collective bargaining system that is prevalent in Europe.
Giving workers ownership stakes in their companies and an equal say in company boards is also part of his agenda. Under his Corporate Accountability and Democracy Plan, private companies with at least $100 million in annual revenue or at least $100 million in balance sheet total and all publicly traded companies would have to be at least 20% owned by employees. The employee-owned shares would be placed in a fund controlled by a Board of Trustees directly elected by the workforce. The fund would have voting rights, and workers would receive dividends from it. Forty-five percent of the board of directors at these large corporations would also be elected by the workers. Sanders also promises that workers would have the right of first refusal if their company goes on sale or plans to move overseas and will be provided with financial and technical assistance from the U.S. Employee Ownership Bank he will create.
While companies are increasingly opting for outsourcing or automation, if Sanders is president, their owners would have to donate shares to U.S. workers laid off due to such transitions. He also wants to stop corporations from sending jobs overseas by eliminating tax deductions, include labor, environmental, and human rights standards and rules against currency cheating in every U.S. trade agreement and expand “Buy American” government policies.
Sanders has proposed a federal “tax on extreme wealth.” The progressive wealth tax, which would apply to net worth of over $32 million, is expected to raise an estimated $4.35 trillion over the next 10 years and cut the wealth of billionaires in half over 15 years.
The tax brackets for married couples are as follows and rates are halved for singles:
- Net worth of $32 million and above: 1%
- Net worth of $50 million to $250 million: 2%
- Net worth of $250 million to $500 million: 3%
- Net worth of $500 million to $1 billion: 4%
- Net worth of $1 billion to $2.5 billion: 5%
- Net worth of $2.5 billion to $5 billion: 6%
- Net worth of $5 to $10 billion: 7%
- Net worth of Above $10 billion: 8%
“One of the biggest sources of wealth for middle-income families is owner-occupied homes, which are taxed in most states at rates that can be as high as, or even higher than, 1%,” says the campaign website. “Meanwhile, the vast majority of the wealth owned by the top 0.1% of Americans is not housing or real property and is not subject to any sort of property tax. This proposal would ensure that assets owned by the top 0.1% are taxed the same way as much of the wealth owned by the middle-class is already taxed.”
Sanders, who successfully pressurized Amazon.com Inc. (AMZN) to raise its minimum wage to $15 last year, is also proposing progressively higher corporate tax rates for private and public companies whose top executives take home “exorbitantly” higher amounts each year than their typical workers. More specifically, the new Income Inequality Tax Plan would penalize companies whose highest paid executives make over 50 times their median worker pay. It would only apply to corporations that generate annual revenue of over $100 million.
The increase in corporate tax rates based on compensation ratios would be as follows:
- Between 50 and 100: +0.5%
- Between 100 and 200: +1%
- Between 200 and 300: +2%
- Between 300 and 400: +3%
- Between 400 and 500: +4%
- More than 500: +5%
Sanders’ campaign website says the plan would raise around $150 billion over 10 years if corporations continue to maintain the current level of pay gaps, and the revenue would be used to eliminate medical debt.
In addition to this, Sanders says up to $3 trillion in revenue can be collected in 10 years by raising the corporate tax rate back to 35% from 21%, closing corporate tax loopholes, taxing the money corporations earn overseas at the full corporate tax rate, forcing companies with over $25 million to disclose country by country financial information and removing the 20% tax break for pass-through business income that went into effect in 2018. Large pass-through businesses would also be subject to corporate taxes under his plan. The campaign notes that if this plan had been in effect last year, some companies that paid no U.S. federal income taxes, like Amazon, Delta Air Lines Inc. (DAL), Chevron Corp. (CVX) and General Motors Co. (GM), would have owed over $1 billion.
Wall Street Tax
The financial transaction tax (FTT) Sanders proposes is a 0.5% tax on stock trades, a 0.1% fee on bond trades, and a 0.005% fee on derivative trades. This is expected to raise $2.4 trillion over 10 years, according to research by left economist Robert Pollin cited by Sanders. Currently 40 countries have FTTs and the concept goes as far back as the Great Depression. British economist John Maynard Keynes was one of its earliest proponents and suggested in The General Theory of Employment, Interest, and Money the U.S. should introduce “a substantial government transfer tax on all transactions” on Wall Street in order to curb “the predominance of speculation over enterprise.”
Wall Street Reforms
Sanders’ campaign doesn’t yet have a plan for reforming Wall Street as detailed as Sen. Elizabeth Warren’s, but he does want to reinstate the Glass-Steagall Act, cap credit card and consumer loans interest rates at 15%, expand basic and affordable banking services offered by post offices, audit the Federal Reserve, reform credit rating agencies and curb speculation with the tax mentioned earlier. Wall Street asset managers would have to follow investors’ instructions or lose their right to vote on shareholder money if Sanders is elected. He also plans to organize sectoral pension plans that would wield more bargaining power and “ditch Wall Street asset managers by taking voting in-house.”
Determined to curb corporate greed and corruption, Sanders would establish a Bureau of Corporate Governance at the Department of Commerce if elected. Large corporations would need to obtain a federal charter forcing their boards to consider the interests of all of the stakeholders, not just shareholders. (He called the Aug. 2019 Business Roundtable commitment to this “empty words.”)
Besides giving workers more rights (as discussed above), he would also ban large-scale stock buybacks by repealing the SEC’s Rule 10B-18, force corporate boards to include individuals from historically underrepresented groups, protect the rights of farmers and consumers to repair the equipment and technology they purchase, develop guidelines for anti-competitive exclusivity agreements, develop stricter antitrust rules and allow the Federal Trade Commission to approve, deny or undo Trump-era mergers.
Green New Deal
Sanders has his own version of a Green New Deal. The goal of the plan is to reach 100% renewable energy for electricity and transportation by 2030 and complete decarbonization by 2050 at latest.
It involves a $16.3 trillion public investment and the creation of 20 million “good paying, union jobs with strong benefits and safety standards” in steel and auto manufacturing, construction, energy efficiency retrofitting, coding and server farms, renewable power plants and sustainable agriculture. If elected, he also promises to ban fracking and mountaintop removal coal mining. He says he would promote electric vehicles with $2.09 trillion in grants for families and $85.6 billion on a national electric vehicle charging infrastructure. (Why is Elon Musk still not a fan? Well…)
Of the $3 trillion raised from corporate taxes in 10 years, $2 trillion would be devoted to the Green New Deal. The campaign website also adds the plan would basically pay for itself. Sanders plans to target the fossil fuel industry with litigation, fees, taxes, and eliminating federal fossil fuel subsidies. He also says there will be cuts in military spending, since the U.S. would not be fighting expensive wars to protect its access to oil abroad, and an increase in tax revenue and decrease in safety net spending due to the new jobs created.
In 2015, Sen. Bernie Sanders introduced the first standalone bill to remove marijuana from the Controlled Substances Act and make it legal. Sanders, who believes the current law disproportionately targets African Americans, was also the first high-profile 2016 presidential candidate to call for marijuana legalization on the federal level.
If elected in 2020, he promises to issue an executive order to declassify marijuana as a controlled substance and introduce legislation to make it permanent. His plan has two parts – undo the damage of the war on marijuana and regulate the legal marijuana industry with strict laws to prevent it from becoming like Big Tobacco.
His administration would review and expunge all current and past marijuana-related convictions and devote funding and manpower to make sure no one slips through the cracks. Tax revenue collected from the marijuana industry would go toward helping communities impacted by marijuana convictions.
According to his plan, market share and franchise caps would be introduced to “prevent consolidation and profiteering” in the industry. Businesses would be incentivized to be structured like cooperatives and collective nonprofits. Tobacco companies would be prevented from participating in industry. This would spell trouble for giants hoping to diversify their businesses, like Marlboro-maker Altria Group Inc. (MO) which bought almost half of Canada-based Cronos Group Inc. (CRON) in 2018.
Safety measures proposed include a ban on marketing products to young people and barring companies that run misleading advertisements or create products that cause cancer from the industry.