The US Democrats' tax plan: soak the rich

THERE'S no subtlety about Democrats' tax plans. Between Hillary Clinton and Bernie Sanders, details differ, but the central themes are identical: soak the rich. To hear Democrats tell it, the country's main budget problem is that the rich don't pay their "fair share". If they did, the fiscal outlook would brighten. We can now test this proposition, because the Clinton and Sanders tax proposals have been thoroughly analysed by the non-partisan Tax Policy Center (TPC).

To begin, it's worth noting that the rich, defined here as the "top one per cent", don't escape taxation. Some manipulate the system to minimise or eliminate taxes, but as a group, the top one per cent accounted for 14.6 per cent of pre-tax income in 2011 and paid 24 per cent of federal taxes, estimates the Congressional Budget Office (CBO). Whether that's a "fair share" is, of course, a matter of opinion.

Regardless, both Mrs Clinton and Mr Sanders would increase it sharply. Start with Mrs Clinton. The TPC reckons that her tax package would raise US$1.1 trillion over a decade. The top one per cent would pay about three-quarters of the increase, with other high-income households covering most of the rest. "The bottom 95 per cent would see little or no change in their taxes," says the TPC.