As the presidential election progresses, Wall Street grows increasingly fearful that the “radical” economic proposals of Bernie Sanders or Donald Trump could become a reality. They might want to worry about the “mainstream” candidates as well.
The CEO of Goldman Sachs and billionaire investors have already publicly voiced their concerns that a Bernie Sanders presidency could be disastrous for... well, for people like them. The entire Republican establishment is likewise terrified of Donald Trump. In the Wall Street Journal today, Greg Ip writes that the popularity of Sanders and Trump is shaking the confidence of the markets: “The risk lies not just in their policies, which are radical enough,” he writes. “The greater risk is that both men represent a rejection of economic orthodoxy. They don’t especially care that mainstream economists pan their proposals.”
It is not surprising that the political establishment would dislike these two candidates, both of whom, in their own ways, reject that establishment. What is more surprising is that these public guardians of economic probity aren’t more worried about the economic plans of the “mainstream” candidates.
- Bernie Sanders’ policies like expanding public health care, making higher education free, and raising the progressive tax rate to pay for it all are well known. And he was, in fact, recently attacked by a group of former White House economic advisors, primarily for his assertions about how high his policies could boost the growth rate. This is the exact same criticism that was leveled at Jeb Bush’s economic plan. Bush’s tax plan, which would cost the government $1.6 trillion over the next decade and would cut the highest tax rate to 28%, is not considered “radical.”
- According to the Tax Foundation, Ben Carson’s economic plan, which would impost a flat tax, would increase taxes on everyone except the top 10% of earners, and would increase the income of the top 1% of earners by 33%. Instituting a powerfully regressive tax plan that hurts the poor and helps the rich during a period of nearly unprecedented inequality is not considered “radical.”
- Ted Cruz’s tax plan would also institute a flat tax, reduce federal tax revenues by nearly $800 billion over a decade, and would abolish the IRS. Destroying the very federal agency that collects all government revenue that funds the entire government is not considered “radical.”
- Marco Rubio’s tax plan would completely eliminate the tax on capital gains as well as the estate tax. This virtually unprecedented gift to America’s highest earners, which would help to consolidate and strengthen dynastic wealth, is not considered “radical.”
- Hillary Clinton’s tax plan is the most modest one of all, meaning that it would change the current system the least relative to her opponents. This is no doubt why she is the favored candidate of Wall Street, which is fairly happy with our current tax regime.
The definition of “radical” changes with your income bracket.