A new analysis of the Democratic Socialists of America's (DSA) policy agenda projects staggering costs that could exceed trillions of dollars over the next decade, potentially leading to unmanageable federal spending and necessitating massive tax hikes. The assessment, conducted by Adam Michel of the Cato Institute, suggests that even with the highest possible tax rates on wealthy individuals and corporations, the DSA's proposed programs would remain significantly underfunded.
The DSA's platform includes several major initiatives such as universal healthcare, slavery reparations, a jobs guarantee, and housing for all. Michel's analysis estimates the combined cost of these proposals to be between $71.2 trillion and $211.6 trillion over a ten-year period. This range, he argues, would drastically increase federal spending as a percentage of GDP, reaching between 57% and 92% on the higher end.
According to the analysis, even confiscating all the wealth of the richest Americans, all corporate profits, and implementing maximum top income tax rates would still leave a shortfall of $29 trillion to $169 trillion. To cover the remaining costs, the study claims that taxes on middle-class Americans would need to increase substantially, potentially more than quadrupling current collections. The analysis suggests that existing tax brackets would need to exceed 100% and top rates could reach over 160%.
The report posits that such high tax rates could lead to negative economic consequences, including individuals relocating, increased black market activity, and reduced work hours, further widening the funding gap. The analysis draws a parallel between these projected outcomes and historical instances of socialism leading to poverty and hardship. DSA national co-chair Megan Romer has stated a belief in taxing millionaires significantly, but the specifics of such taxation remain undefined, according to the report.