Sanders’ ‘socialism’ isn’t that far from mainstream

Voters have heard that Bernie Sanders is a socialist, but many fail to realize that he is a democratic socialist and that between pure capitalism (an entirely free and unregulated market) and pure socialism (government ownership of property and control of the economy), a range of economic systems are possible.

The American economic system consists of a variety of laws regulating property, contracts, bankruptcy, monopoly, and enforcement. Unfortunately, these laws currently favor large corporations and the wealthy, resulting in the redistribution of wealth upward. The current system could be called plutocratic capitalism (capitalism by and for the wealthy) and has created a dramatic growth in inequality since the 1970s.

In 2012, the top 10 percent of families took in 58 percent of the national income. In terms of wealth (the value of a family's assets minus its debts), the top 1 percent owned 40 percent of the country's wealth. The bottom 40 percent of families owned 1 percent. The CEOs of the Standard & Poor's 500 companies each made on average about $14 million a year. Eight made $100 million or more a year. Male laborers paid the median wage in 2007 earned less (adjusted for inflation) than the median wage 30 years ago. In 2012, forty to fifty million Americans were living in poverty.

A study of 280 of the largest corporations from 2008 - 2010 found they had pretax profits of $1.4 trillion. Although the top federal tax rate for a corporation's income is 35 percent, given their loopholes and exemptions, these corporations' average rate was 13 to 15 percent.

Sanders' economic proposals merely aim to use our country's wealth for the public good. Among other proposals, Sanders would raise the minimum wage to $15 per hour by 2020, make college tuition free at public colleges and universities, break up the too-big-to-fail financial institutions, invest heavily in rebuilding our crumbling infrastructure, and lift the social-security-tax cap on those who make over $250,000 so that they pay the same percentage of their income as middle and working families.

A recent study by the independent Tax Policy Center has shown how much revenue can be raised by changing our tax structure. Many voters forget that for over thirty years following World War II the top federal tax rate averaged 80.6 percent. In contrast, the average tax rate paid on reported income by the wealthiest .01 percent in 2009 was 19.9 percent. The Center estimated that raising the top tax rate to 45 percent for the wealthiest 1 percent would produce about $276 billion in revenue in the first year. If current deferrals on corporations' profits kept overseas were ended, $900 billion would be generated over ten years.

As voters examine Sanders' proposals, they will see that he is not trying to end capitalism, only make the system work for all Americans, not just the top 10 percent. Although his plans can be labeled democratic socialism, they also can be called public-good capitalism. Once voters realize what his positions are, they may be surprised to discover that they too are democratic socialists.

' Thomas W. Hill is an Emeritus Professor of Anthropology at the University of Northern Iowa. Comments: thomas44hill@q.com