Willful Ignorance or Just Alzheimer's?

Recent polls for hopeful presidential candidates are starting to indicate the impossible…

Bernie Sanders is beginning to turn the tide against the almost certain Democratic nominee, Hillary Clinton, based on the most recent polls from the crucial battleground state of New Hampshire.

To tens of millions, this may seem like vindication… a much needed light at the end of the tunnel that, upon arrival, will answer all questions pertaining to debt, income, education, health care, and whatever else tends to stress people nowadays.

For the rest of us, however, this popular swing signals that something has gone very, very wrong with the world.

Bernie is a self-proclaimed “Democratic Socialist,” which, based on some of the models we’ve seen out of Europe, can actually work in sustaining a relatively small population.

Norway and Denmark are two common examples.

However, when looking at just what sort of numbers a bona fide Sanders administration would want to impose on the world’s biggest, most globally integrated economy, one begins to wonder…

“Willful ignorance” has come to mean any situation in which people intentionally send their attention away from an ethical problem that is believed to be important by those using the phrase – either because the problem is too disturbing for people to want it dominating their thoughts, or from the knowledge that solving the problem would require extensive effort. This phenomenon is closely related to the aphorism, “Ignorance is bliss.” — Wikipedia

Is this just willful ignorance on the part of a man desperate to be elected?

Or is he actually in need of a thorough neuropathological workup to ensure that he’s not suffering from some advanced form of brain-wasting sickness that causes a total inability to comprehend basic arithmetic?

The Numbers Don’t Add Up

Bernie’s tax plan adds $1 trillion of new taxes — coming almost entirely from the upper-income tax bracket.

Let’s put things into perspective here.

If he intends to hit the 1% with this 12-figure tax hike, that amounts to roughly $833,000 per household per year.

And remember, that’s in addition to what they already pay, which, as of last year, was 45.7% of the IRS total annual income tax revenue.

So how much of their annual income will the 1% have to pay, on average, if Bernie’s policies escape the cobwebbed caverns of his mind and manifest themselves in the real world?

Almost 200%.

The median one-percenter household, as of 2013, brought in only about $428,000 in adjusted income.

So assuming that Bernie Sanders isn’t actually a real-life version of his namesake from the movie Weekend at Bernie’s and has some semblance of blood pressure north of his neck, we move this tax burden from the 1% and expand its effect to the top 10% nationally.

The top 10% earning households are about 12 million strong.

Median income for the top 10% on a national basis is just $127,695, also as of 2013.

Dividing this $1 trillion in new income tax revenue adds an average $83,000 to each tax bill, which would effectively put a majority of the individuals in the top 10% close to if not past the poverty line.

So clearly, Bernie, the man of the people, the Pied Piper of the Disenfranchised, must have cooked up some other plan to make this all work.

Well, the scary fact is, for the most part, it doesn’t appear he has.

He’s put some more effort into concealing the source of all this revenue in the proposals he’s tossed out to the media, but in the end, the story plays out the same.

Let Fantasy Become Reality

No matter how you slice it, his $1 trillion per year overheard for the creation of his socialist utopia adds an additional 30% to the total annual tax burden imposed on this nation’s individuals, employers, and corporations.

As it stands, that total already set records when it surpassed $3 trillion for the first time just two years ago.

By far the biggest prong of this revenue comes from individuals — about $1.4 trillion annually — followed by employment taxes, which come in at right around $1 trillion. In a distant third are corporate taxes, which rake in about $400 billion each year.

Given his repeatedly stated intention to hit rich individuals and corporations especially hard, it’s safe to say that some version of the two clearly unfeasible scenarios I mentioned are actually spinning around in old Bernie’s head.

Here’s one potential package he actually proposed to make his free-for-all society a reality…

An employer tax hike of $630 billion annually — raising current rates by more than 60%.

An individual tax hike of $210 billion — taken from the nation’s top earners, or about 2 million households… an average of better than $100,000 per household.

To help finance his “Medicare for all” dream, Bernie also plans an all-new 6.2% employer tax, which he likes to call an “income-based health care premium” (probably to keep his supporters comfortably numb to the fact that they’re actually going to be on the hook for this).

In addition, to fund his proposed “free tuition” program, there’s Bernie’s “Robin Hood” tax, which would impose a $0.50 fee on every $100 traded in stock transactions.

Any way you slice it, this man’s plan for the future looks less like a business model and more like an unhindered shopping spree, all at somebody else’s expense.

And when I say somebody else’s, I don’t just mean the 1% or the 10%… because for plans of this magnitude, there simply aren’t enough of them to pay for all this.

It will end up on all of our backs one way or another.

So What is Bernie Thinking?

Is he thinking at all, or is his brain merely an organic paper shredder/recombiner that takes the complaints, demands, and pleas of his constituency, mashes them all together, and spits them back out in a disjointed but colorfully pleasing narrative?

The answer to that can only be provided by extensive time in an MRI machine.

Frankly, I think he’s just like the others: willing to say and do anything to get elected.

We already know he spends enough time and money on a hairstylist to ensure that the heroic white cloud resting atop his head remains the benevolently irate, never-quite-groomed, yet remarkably unvarying trademark that it’s become.

Another thing we know for certain is that the very top of the pyramid, which Bernie states he wants to topple in an effort to inject some artificial equality into the system, isn’t going to take this sitting down.

With most of their income coming from capital gains — an as-of-now permissive system that allows for decreased tax liability on long-term investments — Bernie’s proposed changes will have a widespread and significant effect on the net worth of the nation’s wealthiest.

Unfortunately for Bernie’s utopia, these are exactly the kind of people who, when the conditions become infertile, tend to just pick up and leave.

They did it in France just a few years back, when the French government decided to “experiment” with a 70% upper income tax rate, fleeing to the UK in such numbers that the tax revenue from that population segment actually fell by more than a third the year after these socialist policies were put into place.

And it will happen here, too — only in greater number, with the dollar value lost to expatriation well into the trillions.

As the case usually is, the super-rich will be okay.

No amount of Bernie’s willful ignorance, ruthless campaigning, or downright senility will be enough to get them down.

Those who will suffer the most will be those who cannot do anything about it.

The middle class, as well as those on the cusps of affluence, will be hit the hardest and forced to shoulder a disproportionate burden, all for the sake of Bernie’s pipe dream.

With the rich, so too will go the corporations, the industry, and the markets, taking even more potential tax revenue off the table, even before it can be cannibalized and squandered by the tentacles of socialism.

What comes next will make the recession of 2008 look like a quiet day on the New York Stock Exchange.

Big enough of a disaster, perhaps, to bring an end to the Federal Republic altogether — going the way of the USSR in the 1990s.

Bernie Will Arrive Sooner or Later

So is it time to be afraid?

Well, the fact is, it’s still likely that Hillary will win, regardless of Bernie’s recent advances in the polls.

However, in view of just how popular his willfully ignorant thinking is, the prospect of future Bernies in future elections is now at its highest ever.

Sooner or later, we will see this sort of mental illness posing as fiscal policy coming home to roost in D.C.

And your only way out of it, unfortunately, is to insulate yourself against its effects by building your own wealth.

When time is limited, your best bet to do that is to find the biggest industrial trend on the horizon and stack your chips there.

Easier said than done, I know, but sometimes these industrial trends are just as easy to see coming as the darkness floating in on Bernie’s patchouli oil-soaked coattails.

Fortune favors the bold,

Alex Koyfman

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