Economists Who Bashed Bernie Sanders’ Tax Plan Admit They’re Clueless: “We’re Not Really Experts...”

[Nanjeanne]

On Friday afternoon, the Tax Policy Center (TPC) — a project of centrist think tank Brookings Institution — published a thoroughly-flawed analysis of Bernie Sanders’ tax plan. The TPC claimed that by raising $15.3 trillion in new revenue over ten years to fund Sanders’ proposals for free public college, universal health care, paid family and medical leave, and millions of new infrastructure jobs, the overall income of the average American would drop by approximately 12 percent.

However, the analysis was fundamentally disingenuous, as it analyzes the tax increases in a vacuum and does not account for the tremendous amount of savings that would be realized by families using public health insurance and colleges. It also does not account for the overall economic benefit of 13 million new public sector jobs and the resulting flow of new money into the economy.

“We do not account for the effects of the new government programs on income,” TPC co-founder Leonard Burman told Politico, in a revealing quote buried thirteen paragraphs below Politico‘s misleading headline. “We’re not really experts on the spending component.”

Read here: http://usuncut.com/news/sanders-shoots-down-tpc-analysis-of-tax-plan/

[MisterP]

1. outside agitators, eh?

[tularetom]

2. I wondered about that when I read that post that gleefully trashed Sanders tax plan

In fact I googled the Tax Policy Center to find out if it was some sort of David Brock slime site with a fancy name that really exists only to shill for Hillary Clinton. I'm still not certain that it isn't.

[Nanjeanne]

4. I didn't know anything about TPC and David Brock but I do know

and have posted in the gazillion threads about the TAXES!!!!!! that the heads of the TPC are:

Robert C. Pozen Former chairman of MFS Investment Management, the oldest mutual fund company in the United States. For 15 years, he was a key executive at Fidelity Investments, ending as vice-chairman. He was Secretary of Economic Affairs for the State of Massachusetts in 2002–03, was a member of President George W. Bush’s Commission to Strengthen Social Security in 2001-02, and chairman of the SEC Advisory Committee on Financial Reporting in 2007-08. Mr. Pozen serves on several boards, including Medtronic, Nielsen and a subsidiary of the World Bank.

William A. Gale. Prior to joining Brookings in 1992, he was an assistant professor in the Department of Economics at the University of California, Los Angeles, and a senior staff economist for the Council of Economic Advisers under President George H.W. Bush.

And Len Burman who's quote is in this article - well he was a member of Bill Clinton's administration. Now I don't know if he's biased or not - but I certainly keep that information in my mind when reading his quote! Plus he is the author of a policy paper encouraging the use of VAT tax to get vouchers for healthcare. Not the kind of guy I want making decisions for me.

[tularetom]

11. Oops, responded to my own post by mistake

See #8

[Enthusiast]

19. I'm glad they are so unbiased.

[tularetom]

8. Very interesting indeed

I just used David Brock as kind of a symbol for the kinds of slimy things that crawl out every time you turn over a rock involving the Clintons.

Mr Burman seems to be the lead apologist on the one sided "analysis" of the Sanders plan, so I'm not at all surprised that he has long standing ties to Bill Clinton. In think he should always be identified as having those ties.

[ghostsinthemachine]

14. I got it sent to me about twenty times

Along with the quote by pat Moynihan. I will send this in my response, knowing that not a single one will read it.

[Tierra_y_Libertad]

3. I look at political or economic "experts" in the same way that look at salesmen.

There are no facts, only interpretations. Friedrich Nietzsche

[Gregorian]

5. This is what we mean by establishment.

These guys are outside of their comfort zone. And don't just take my word for it: Richard Wolff has been saying that American economists just don't know about anything that isn't in their narrow, confined avenue of study. That sounded like an absurd comment until I saw the phony articles coming from no less than Krugman.

It's just easier to sit back and earn a living, never caring about how things are working for those who are under the financial radar.

[Uncle Joe]

6. Kicked and recommended.

Thanks for the thread, Nanjeanne.

[Hoyt]

7. Apparently the author didn't read the entire study -- If he had made it to Appendix B

"APPENDIX B. THE EFFECT OF SENATOR SANDERS’S PROPOSALS ON WAGES TAX POLICY CENTER | URBAN INSTITUTE & BROOKINGS INSTITUTION

"Under Senator Sanders’s proposal for a federally administered, universal health insurance plan, employers would pay a premium of 6.2 percent of payroll, but they would no longer need to pay private health insurance premiums. If one assumes that total employee compensation remains the same, a worker whose employer pays private health insurance premiums that are more than 6.2 percent of his or her wages will see an increase in take-home pay under the Sanders proposal. Some or all of that saving may be offset by other payroll tax increases, however.

"In the hypothetical examples shown in table B1, total payroll taxes (including the portion paid by employers) would increase by between $3,900 and nearly $5,000 for middle-income workers. Despite the increase in payroll taxes, the workers covered by employer-sponsored health insurance plans would save enough in the switch from employer-sponsored health insurance coverage to the new government plan to more than offset the additional payroll taxes, and thus their take–home pay would increase. The worker without health insurance would have lower take-home pay but in return would gain health insurance coverage and coverage for paid family and medical leave (FML)."

_______


Of course, all of that assumes Sanders can actually cut total annual health care expenditures for the current $3 Trillion, to $1.38 Trillion. I think that is highly unlikely when he is supposedly not going to have any deductibles, coinsurance, taking on millions of people not currently insured, etc. I believe all those things are worth doing. Sanders just needs to be honest about the cost and his chances of getting any of that done.

[Nanjeanne]

9. Well these vague caveats in Appendix B are a little hard to find, aren't they?

I read the entire 50 page analysis and many times there were references to things like (I'm paraphrasing because I didn't save the analysis) these are difficult to analyze because they are unheard of and have never been tried yada yada yada.

If you read the entire analysis - which I'm assuming you did since you got to Appendix B . . .

you must have also seen that the whole tax analysis wasn't just about health care vs insurance - but that it also included:

Tuition Free College
Expanded and Secured Social Security
Paid Family Leave
A very extensive Jobs Bill
A good Youth Program
A plan to control Pollution through a Carbon Tax

I think Sanders is being as honest as anyone can be about the cost of things since so much of our economics is tied to so many different things and spread out over a 10 year timeframe. As for chances of getting anything done - I look to the President as a person who gives us a Vision for what they want this country to be and who will use his bully pulpit to inspire us to demand more and inspire and lead our Congress. Without vision - we have nothing. If he can't get it done - so be it. I voted for Obama because of what he told me this country could be. He didn't achieve everything and some things he disappointed me greatly on. But I never regret that I was inspired.

[Hoyt]

13. A problem with studies written by academics. They expect readers and critics to read the whole dang

thing. Unfortunately, that doesn't happen with a lot of Sanders' supporters.

Fact is, Sanders plans will increase taxes. The impact on disposable income is questionable because if Sanders doesn't decrease expenditures on health care sufficiently or his other programs need more revenue or his projected increase in GDP doesn't occur, taxes will have to increase even more.

[Nanjeanne]

15. True. Fact is Sanders plans will increase taxes. Fact also is that

every single country that has healthcare system similar to what Sanders is proposing spends less on health care than we do iin this country.

You are correct that it's hard to project anything based on anything because there are always variables. But this is how we do things. If some tax policy group is going to do an analysis - that's the parameters they work with. While the TPC says one thing, the CTJ and ITEP say something different.

However, Politico and other media seem to only want to pull out scary TAXES!!! from the TPC while ignoring any details and ignoring completely the CTJ and ITEP analyses.

My bigger objection is that Democrats use Republican fear tactics over TAXES!!!! to demonize a candidate that is running against a candidate they prefer. I find it a huge turnoff and a big reason for me - a 45 year long Democrat - to turn my back on politics as usual.

[mwooldri]

22. Return on investment. ...

I can't remember where I saw it but somewhere I remember seeing if the government spent $x on such and such a program, the benefit to the economy as a whole was y% - depending on the program $1 spent might return $1.20 to the economy.

[daleanime]

36. +1

[paleotn]

40. "My bigger objection is that Democrats use Republican fear tactics over TAXES!!!!"

That's because 20 years ago, they were Republicans, but can't handle the crazies that have taken over their former home. Thus, they're trying to turn the Democratic Party into Republican light. And I thought we got rid of the conservo-dems when the Dixie-crats left and took their racism with them. Guess not.

[paleotn]

37. "Sanders plans will increase taxes"

...Yes, but for the vast majority of Americans, the total cost will be less than they're paying now for taxes AND ridiculously expensive health insurance. As for decreased health care expenditures, since apparently no brainers are hard for you to grasp, how about some examples....



The best analog for the US is Canada. In 2012, their expenditure per capita is roughly 54% of ours. And you guessed it...universal health care. And the savings aren't just for average Americans. One of the most significant competitive issues for American companies is our antiquated, hugely expensive health care system. Compared to what corporate America is currently spending to partially fund employee health care, the financial benefits of government sponsored, universal health care will be huge.

From an entrepreneurial standpoint, most Americans simply can't leave their company paid health care benefits. With universal health care, that is no longer an issue.

For virtually free post secondary education, the funding mechanisms are a 0.5% tax on equity trades, 0.1% tax on bond trades and 0.005% tax on derivatives. Hardly crushing, unless one is into automated, high frequency trading, a la Las Vegas or churning your clients accounts for profit.

[libdem4life]

50. Sorry, but your second correct point requires being intellegent enough to grasp two ideas at a time.

The "I like the first one best" is ingenuous and terribly misleading. TaxesTaxesTaxesTaxesTaxes...uh, yeah, healthcare...TaxesTaxesTaxes ad nauseum.

[frazzled]

10. Neither are the Sanders number crunchers

and these people, unlike Gerald Friedman, are at least not "paid consultants" to the Sanders campaign.

The Congressional Budget Office is the only standard by which we can evaluate "the effects of new government programs on income." But they're not going to run those numbers until if and when Sanders proposes the tax increases and new programs to Congress.

So game on. The people will have to decide if they think these programs and tax proposals are viable for them to take a gamble on.

[Human101948]

24. Yep, better to stick with the half assed system we have now...

Where college costs more than a mortgage and returns much less. Where health care is twice as expensive as most other developed countries with worse results. Yep, that's what we really want.

[paleotn]

42. +1000 (nt)

[Babel_17]

12. Sounds like they were there for the buffet, and the open bar

The per diem night have been decent as well.

[retrowire]

16. You're not really experts?

Then shut the fuck up.

[Nanjeanne]

17. Well to be fair (HA) they're not experts on the spending part. Only the cost (funny if not so sad)

“We do not account for the effects of the new government programs on income,” TPC co-founder Leonard Burman told Politico, in a revealing quote buried thirteen paragraphs below Politico‘s misleading headline. “We’re not really experts on the spending component.”

[Hydra]

32. That's like a surgeon saying:

"I'm perfectly fine chopping people up, but I'm a little hazy on where to put things back in and how to sew them up. But don't worry, I'm perfectly qualified!"

[jalan48]

18. I'm not sure the MIC will go for it.

More educated, less fearful citizens means less sheeple. Not good for the armaments business.

[valerief]

20. That's okay. Damage is done. They've done their job well.

[Hydra]

34. That's all Team Hill is trying to do

The old Republican trick of making an issue look like it's not as clearcut as it is. Sowing doubts. Creating irrelevant narratives. Lying about the facts.

I can't believe our party is openly doing this.

[A Simple Game]

21. The Brookings Institution is a centrist think tank? Since when is it centrist? n/t

[Nanjeanne]

23. I think people are talking about the Tax Policy Center that did the analysis

That organization is headed by people who worked for George H and W. The person quoted in article on Politico is from Bill Clinton's administration.

I don't see anyone discussing Brookings Institution - although Strobe Talbott, Pres was also in Clinton's admin and goes back with Bill as far as when they were both at Univ of Oxford together and he is a top Soros advisor. Whether those affiliations mean anything - who knows?

Martin Indyk, Vice Pres is also from the Clinton administration. Interesting footnote -he was the first United States ambassador to be stripped of a security clearance. Indyk was under investigation for improperly handling sensitive material. Indyk's clearance was restored a month later, by Secretary of State Madeleine Albright. Now whether those affiliations mean anything -- who knows?

I find it fascinating to see how cronyism and relationships can filter "analysis" - but hey, that's just me!

[Luminous Animal]

41. Since it was all gung ho for the Iraq War.

[AzDar]

25. Wow.

[Kip Humphrey]

26. I would say that they are at least very much experts in lying while Hillary supporters.

[Kalidurga]

27. Of course they are clueless.

I think we all are clueless. The best we can do is look for evidence like what happens in other countries. Figure out what is going to be spent and then figure out what isn't going to be spent and then figure what will people do if they have more disposable income. There are far to many factors to make a solid prediction.

[pdsimdars]

28. It's the same with all these hits on Bernie . . . . .

They make the hit and all the Hill-bots believe it's true, just like the Republicans believe in any anti-Obama thing that comes up.
But then, when you look into it carefully, it falls apart as the sham it was.
You'd think the "true believers" would eventually start to think for a second before jumping head long into this week's smear.
"Let's see, they all turn out to be wild exaggerations, distortions or downright lies, maybe we should look into it FIRST, instead of just accepting it."

[mhatrw]

29. The Tax Policy Center

https://en.wikipedia.org/wiki/Tax_Policy_Center

In 2002, tax specialists who had served in the Ronald Reagan, George H.W. Bush, and Bill Clinton administrations established the Tax Policy Center to provide analysis of tax issues.

TPC is funded by individuals, corporations, trade groups, and foundations including the Ford Foundation, the Bill and Melinda Gates Foundation, and the Rockefeller Foundation.

***

So Rockefeller Republicans lie about Bernie Sanders' proposals.

[MrMickeysMom]

30. “We’re not really experts on the spending component.”....

You're a centrist think tank from the Brookings Institute.... DUH!

That's okay, I knew you were a biased motherfucker anyway.

[jmowreader]

31. Somehow I don't really believe a site that has THIS story on its front page

"Ted Cruz Just Ate a Booger on Live TV. We’re Better Than This."

http://usuncut.com/news/ted-cruz-ate-a-booger-oh-my-god/

[Nanjeanne]

35. Don't believe the "site" if you don't want to. You can actually read the analysis by the TPC and

figure it out for yourself.

Just FYI - US Uncut is a grassroots organization that focuses on tax policy and pushes for corporate tax reform. It was started in the UK as UK Uncut and focused on tax policy and tax cheaters there first.

But it's not "establishment" enough for you - like Politico - so ignore it.

Focus instead on reading the analysis (it's just about 50 pages and I read it easily enough) - then move on the analysis by the Center for Tax Justice (CTJ) which has a completely different take on Sanders proposal (it focuses mostly on healthcare and obviously is shorter than the TPC.

Or you could just read headlines . . .

[jmowreader]

43. Or I could look at his plan and realize it's more speculative than Reaganomics

His first problem is that he makes a LOT of assumptions. Start here: http://www.dollarsandsense.org/What-would-Sanders-do-013016.pdf, which is Gerald Friedman's analysis of the economics of Sanders' plan. Says Paul Krugman, "The point is not that all of this is impossible, but it’s very unlikely — and these are numbers we would describe as deep voodoo if they came from a tax-cutting Republican.”

http://www.boston.com/news/politics/2016/02/18/how-umass-professor-became-the-center-national-debate-over-bernie-sanders-plan/yDqmRGyZcF8xjZkzc4qBaJ/story.html

The biggest assumption is that the top 1 percent aren't going to simply remove their money from the economy.

One analysis I read said, if the single-payer system comes into effect employers will just increase people's take-home pay to compensate for the health insurance they're not receiving from their employers. Two problems: it assumes the extra taxes Sanders wants won't simply absorb the health insurance premium money, and it neglects the fact a LOT of people are already going to be getting raises because of Bernie's new $15 minimum wage. (Which, as I've said before, is going to be an utter disaster in small-town America.)

Bernie's program almost demands the return of manufacturing to the US to make it feasible...but as long as Bernie is sitting there dreaming up new ways to tax the rich to death - Friedman's analysis calls for the rich to see their incomes fall by roughly half, which is a load of shit - no one's going to do anything that might bring themselves to Sanders' attention.

I don't really have time to go into a long analysis of this disaster, but give me a chance to catch up and I will.

[Nanjeanne]

44. Why are you linking to other people's opinions of you are analyzing his actual plan.

Those links aren't real analysis papers.

But if it makes you feel better to find an opinion that matches yours -- have at it.

[jmowreader]

45. Because people demand links. No other reason.

Here's my own analysis: He needs far more money than he's trying to get through taxation.

Bernie says all his tax adjustments are going to drop an extra $1.6 trillion per year into the Treasury.

The distance between current healthcare spending in the US (approx. $3.6 trillion per year) and what the government is already spending on Medicare, Medicaid and Tricare is more than $1.6 trillion per year. We can trust Bernie to squeeze every nickel of health spending until the eagles scream, and with a lot of luck he should be able to get the current levels of spending down to $1.6T/year.

Now let's throw a wrench into the works: Deferred healthcare. Three weeks ago one of my papers ran an article about a resident who has a Harvoni prescription pinned to his refrigerator. He can't get it filled. His health insurance company refuses to spend $97,000 on one bottle of pills for one guy. There are a LOT of people in that situation - they either can't afford to go to the doctor in the first place or can't afford the script they were handed. And most of them have REALLY expensive conditions. I suspect that if all the people who are doing as this guy is suddenly have the ability to go to the doctor with no out-of-pocket expense, we'll be looking at circa $5 to $7 trillion per year in health spending - of which he's only got $3T to cover the bill. That doesn't count all his other government-funded programs he wants like free college and taxpayer-funded paid family leave.

Step into the private sector a bit. Bernie has called for a $15 minimum wage. Right now it's $7.25...or in another way of looking at it, the new wage he wants is 206 percent of the wage we now have. There are five ways a business can cover this. One is to raise prices, which SeaTac, Washington, businesses subject to that city's $15 minimum have all done. Another is to increase sales, which is a problem: consumer spending is a zero-sum game. If Store A sees an increase in business it comes at the expense of other businesses because there's only so much money to go around. If I invent a better mousetrap the world will beat a path to my door...but at the same time they stop buying the old ones. The third way is to squeeze your suppliers - practical for Walmart, not so for Mom & Pop. The most popular way will be by trimming staffs, and the last is just for the owners to retire.

My opinion of Bernie's plan is twofold: it'll never get implemented because no congressman wants to lose his seat over this kind of tax increase, and it'll be a disaster if it ever did.

[kgnu_fan]

33. kick

[oberliner]

38. What a BS headline

"We’re not really experts on the spending component." is not the same as "We're not really experts"

[PatrynXX]

39. saw that trend on FB

except FB had it as Bernie's taxplan would raise Revenue by $15 trillion. Since when is Revenue a bad thing???

[Ivan Kaputski]

46. This is what happens when the oligarchy doesn't pay the talking heads enough $.

[dana_b]

47. wth??

[corbettkroehler]

48. Unassailable Honesty (graphic)

I meant Senator Sanders, natch!

When you need to wash the taste of corporate shilling from your mouth, savor these details about Sanders' Saturday victories in the heartland:

http://www.democraticunderground.com/1280136421

A N D

For 50 Years, Kansas Has Chosen the Democratic Nominee with 100% Accuracy

[Spitfire of ATJ]

51. They just know tax cuts for the rich have always worked in the past.