Bernie Sanders' Economic Plan: A Second Bill of Rights

Bernie Sanders, a U.S. senator from Vermont, was a frontrunner in the Democratic 2020 primary polls. He eventually suspended his campaign and ceded the nomination to Joe Biden, who went on to win the general election.

Sanders espoused many progressive economic policies throughout his campaign, including universal healthcare and higher taxes on the wealthy and the financial sector. His name has become synonymous in the U.S. with a leftist movement that has energized scores of progressive young people.

21st Century Economic Bill of Rights

During his presidential campaigns and as a senator, Sanders has held the position that every person in the U.S. is entitled to a decent job with a living wage, quality healthcare, a complete education, affordable housing, a clean environment, and a secure retirement. "This is the richest country on Earth and we have 40 million in poverty, 34 million with no health insurance, and half our people living paycheck to paycheck," he wrote on X (formerly Twitter). "I refuse to accept that as normal."

He called for a 21st Century Economic Bill of Rights, referencing the first ten amendments to the U.S. Constitution guaranteeing civil rights and liberties. Notably, President Franklin D. Roosevelt once proposed a second Bill of Rights focused on economic security after his 1944 State of the Union speech. Sanders called it “one of the most important speeches ever made by a president" in 2015 and added that "it has not gotten the attention that it deserves.

Healthcare Is a Right, Not a Privilege

At the center of Sanders' campaign was a proposal to give every American health insurance under a government single-payer system. Sanders also called for lower drug prices and legislation that would allow the government to negotiate prices with pharmaceutical companies, allow patients to import drugs from overseas, and peg prices to the median drug price in Canada, the U.K., France, Germany, and Japan.

Over 30 million Americans were uninsured at the time of Sanders' second presidential run. As he frequently pointed out, the U.S. spends a much higher amount each year on healthcare than most major countries.

Cancel Student and Medical Debt

Sanders also called for the the cancelation of $1.6 trillion in student debt held by 45 million people. Sanders indicated that canceling this debt would give graduates the freedom to pursue careers of their choice, narrow the racial wealth divide, and boost the economy by $1 trillion over the next ten years, per one academic estimate.

Between 2020 and 2023, federal student debt has increased to $1.644 trillion, while the number of borrowers has dropped to 43.6 million.

Sanders has also called for the cancellation of all medical debt. His proposal aimed to eliminate an estimated $81 billion in past-due medical debt, to reform debt collection practices, and to instruct the Internal Revenue Service (IRS) to monitor non-profit hospitals that have special tax-exempt status to ensure they're using the appropriate billing and collection practices.

Sanders also wanted to guarantee higher education as a right for all by taxing what he referred to as "Wall Street gambling."

Workers' Rights

Sanders campaigned for a full-employment economy, in addition to a raising of the federal minimum wage to at least $15 an hour and a doubling of union membership. A job guarantee is a proposal borrowed from Modern Monetary Theory.

Sanders said at the time of his running that he would be an "Organizer in Chief." His Workplace Democracy Plan to reform labor laws and strengthen unions was one of his most detailed and it includes multiple measures. Under the plan, the National Labor Relations Board (NLRB) would certify unions that receive the consent of the majority of eligible workers if the bill were to pass. Employers would be required to begin negotiating a first union contract within ten days of the request. Those that refuse would face penalties.

Sanders also wanted to ban mandatory arbitration, non-compete, and unilateral modification clauses in employment contracts, and to establish a sectoral collective bargaining system similar to those common in Europe.

Giving workers ownership stake in their companies and an equal say in company boards was also part of his agenda. Under his Corporate Accountability and Democracy Plan, private companies with at least $100 million in annual revenue or at least $100 million in balance sheet total and all publicly traded companies would have to be at least 20% owned by employees. 

Forty-five percent of the board of directors at these large corporations would also be elected by the workers. Sanders said that workers would have the right of first refusal if their company went on sale or planned to move overseas. They'd also be provided with financial and technical assistance from the U.S. Employee Ownership Bank he would have created.

Companies are increasingly opting for outsourcing or automation, but their owners would have to donate shares to U.S. workers laid off due to such transitions under Sanders' plan.

Taxes

Wealth Tax

Sanders proposed a federal "tax on extreme wealth." The progressive wealth tax would apply to those with net worth of over $32 million and was expected to raise an estimated $4.35 trillion over ten years and cut the wealth of billionaires in half over 15 years.

The tax brackets for married couples under Sanders' tax were as follows and thresholds were halved for singles:

• Net worth of $32 million and above: 1%
• Net worth of $50 million to $250 million: 2%
• Net worth of $250 million to $500 million: 3%
• Net worth of $500 million to $1 billion: 4%
• Net worth of $1 billion to $2.5 billion: 5%
• Net worth of $2.5 billion to $5 billion: 6%
• Net worth of $5 to $10 billion: 7%
• Net worth of Above $10 billion: 8%

"One of the biggest sources of wealth for middle-income families is owner-occupied homes, which are taxed in most states at rates that can be as high as, or even higher than, 1%," Sanders' campaign website read. "Meanwhile, the vast majority of the wealth owned by the top 0.1% of Americans is not in housing or real property and is not subject to any sort of property tax. This proposal would ensure that assets owned by the top 0.1% are taxed in the same way as much of the wealth owned by the middle class is already taxed."

While he was still in the running for president, Sanders said that he would also pass legislation to establish a progressive estate tax on the wealth of the top 0.2% and scrap the income limit on Social Security payroll taxes. He also said that his administration would "end special tax breaks on capital gains and dividends for the top 1% and substantially increase the top marginal tax rate on income above $10 million."

Corporate Tax

Sanders successfully pressured Amazon.com Inc. (AMZN) to raise its minimum wage to $15 and he proposed progressively higher corporate tax rates for private and public companies whose top executives took home "exorbitantly" higher amounts each year than their typical workers. His Income Inequality Tax Plan would have penalized companies whose highest-paid executives make over 50 times their median worker pay.

Wall Street Tax

The financial transaction tax (FTT) that Sanders proposed was a 0.5% tax on stock trades, a 0.1% fee on bond trades, and a 0.005% fee on derivatives trades. This was expected to raise $2.4 trillion over ten years, according to research by left economist Robert Pollin cited by Sanders.

Forty other countries have FTTs and the concept goes as far back as the Great Depression. British economist John Maynard Keynes was one of its earliest proponents and suggested in "The General Theory of Employment, Interest, and Money" that the U.S. should introduce "a substantial government transfer tax on all transactions" on Wall Street to curb "the predominance of speculation over enterprise."

Wall Street Reforms

Sanders' campaign didn't have a plan as detailed as Sen. Elizabeth Warren's for reforming Wall Street, but he indicated that he wanted to reinstate the Glass-Steagall Act, cap credit card and consumer loans interest rates at 15%, expand basic and affordable banking services offered by post offices, audit the Federal Reserve, reform credit rating agencies, and curb speculation with the tax mentioned earlier.

Wall Street asset managers would have to follow investors' instructions or lose their right to vote on shareholder money. Sanders also mentioned plans to organize sectoral pension plans that would wield more bargaining power and "ditch Wall Street asset managers by taking voting in-house."

Corporate Reforms

Determined to curb corporate greed and corruption, Sanders wanted to establish a Bureau of Corporate Governance at the Department of Commerce if he had been elected. Large corporations would have to obtain a federal charter forcing their boards to consider the interests of all of the stakeholders, not just shareholders.

He would also ban large scale stock buybacks by repealing the SEC's Rule 10B-18, force corporate boards to include individuals from historically underrepresented groups, protect the rights of farmers and consumers to repair the equipment and technology they purchase, develop guidelines for anti-competitive exclusivity agreements, develop stricter antitrust rules, and allow the Federal Trade Commission to approve, deny, or undo Trump-era mergers.

Free Childcare and Pre-K for All

Sanders wanted to spend $1.5 trillion over a decade to guarantee free full-day, full-week, high-quality childcare for every child in America younger than age three, and free universal pre-kindergarten for children older than three years old. 

Sanders also promised to double the funding for The Maternal, Infant, and Early Childhood Home Visiting Program, give childcare workers a living wage, pass a bill to ensure free meals to every child in childcare and pre-k, construct, renovate, or rehabilitate childcare facilities and pre-schools, and make more investments in the public education system.

This was the biggest proposal yet for an issue that most of the Democratic candidates considered important during the primaries, not just for individual families but for the U.S. economy as a whole. Sanders said he would pay for it with the taxes on extreme wealth.

Green New Deal

Sanders had his own version of a Green New Deal. The goal of the plan is to reach 100% renewable energy for electricity and transportation by 2030 and to complete decarbonization by 2050 at the latest.

It involves a $16.3 trillion public investment and the creation of 20 million "good-paying, union jobs with strong benefits and safety standards" in steel and auto manufacturing, construction, energy efficiency retrofitting, coding and server farms, renewable power plants, and sustainable agriculture.

Sanders also promised to ban fracking and mountaintop removal coal mining. He said he would promote electric vehicles with $2.09 trillion in grants for families and $85.6 billion on a national electric vehicle charging infrastructure.

Of the $3 trillion raised from corporate taxes in ten years, $2 trillion would be devoted to the Green New Deal. The campaign website also added the plan would basically pay for itself. Sanders would target the fossil fuel industry with litigation, fees, taxes, and eliminating federal fossil fuel subsidies.

He also called for cuts in military spending and an increase in tax revenue and decrease in safety net spending due to the new jobs created.

Marijuana Reform

Senator Bernie Sanders introduced the first standalone bill to remove marijuana from the Controlled Substances Act and make it legal in 2015. He was the first high profile 2016 presidential candidate to call for marijuana legalization on the federal level.

He promised to issue an executive order to declassify marijuana as a controlled substance and introduce legislation to make it permanent if he had been elected. His plan had two parts:

• Undo the damage of the war on marijuana and
• Regulate the legal marijuana industry with strict laws to prevent it from becoming like Big Tobacco.

He said his administration would review and expunge all marijuana-related convictions and devoted funding and manpower to make sure no one slipped through the cracks. Tax revenue collected from the marijuana industry would go toward helping communities impacted by marijuana convictions.

Market share and franchise caps would be introduced to "prevent consolidation and profiteering" in the industry according to his plan. Businesses would be incentivized to structure themselves like cooperatives and collective nonprofits. Tobacco companies would be prevented from participating in the industry. This would spell trouble for giants hoping to diversify their businesses, like Marlboro-maker Altria Group Inc. (MO), which bought almost half of Canada-based Cronos Group Inc. (CRON) in 2018.

Safety measures proposed included a ban on marketing products to young people and barring companies that run misleading advertisements.

The Bottom Line

Bernie Sanders is a progressive independent senator from Vermont and one of the most popular politicians in Congress. He is most famous for his two runs for president, and he has advocated for progressive legislation that would help redistribute wealth and reduce economic inequality.