There is a growing liberal trend – you might even call it socialist – that could bankrupt America.
Since the left’s loss of power on the federal and state levels, it is moving even more towards socialism in an effort to cure the party’s (and the people’s) ills.
Bernie Sanders and Alexandria Ocasio-Cortez are two of the highest profile socialists promoting an agenda of “the people.”
It includes government-provided health care, jobs for everyone, a $15-per-hour minimum wage, paid family leave, free college, forgiveness of student loans, and more.
It sounds great. But I’m a realist. I know all those benefits would bear costs for somebody.
And those costs would be steep – an additional $42.5 trillion over a decade.
That’s more than twice the national debt.
If that happened, federal spending would rise to 40 percent of gross domestic product (GDP), or about twice the historical norm of 18-22 percent of GDP.
To raise the money, it would essentially require taxing 100 percent of corporate profits and passthrough/family wage income for those making more than $90,000 annually, or $150,000 for a couple. This also assumes we all keep working.
Another route would be a “value added tax” or VAT, which is a national sales tax on all goods and services.
That might seem reasonable, except that it would take an 87 percent tax to cover the socialism tab.
Simply put, if this agenda plays out, it could ruin the economy.
Companies will not give up all profits.
Passthrough income earners and families will not sit calmly while their income is taxed at a 100 percent rate.
And Congress will not pass a VAT of 87 percent.
Not all at once anyway.
It’s not time to sound the warning bells, but there may be a slippery slope ahead.