Bernie Sanders on student debt: what the evidence says · JRE #1330

What the evidence says 01 / RECORD

Sanders has repeatedly paired his college-affordability and student-debt-cancellation proposals with a financial transaction tax he says will more than cover the cost, but independent analysts have consistently produced far lower revenue estimates than the figures Sanders cites. When Sanders made a similar pairing in 2016 (a roughly $50 billion/year free-tuition plan funded largely by a Wall Street tax), the nonpartisan Tax Policy Center put the tax's yearly yield at only $50-60 billion, versus the more than $300 billion figure Sanders relied on -- PolitiFact attributed the gap largely to differing assumptions about which trades are taxed and how trading volume would respond. A similar gap shows up in other Democrats' financial-transaction-tax proposals: the Congressional Budget Office estimated a 0.1% tax would raise about $777 billion over ten years (roughly $78 billion/year), a small fraction of the roughly $240 billion/year implied by Sanders's $2.4 trillion, ten-year figure. Because transaction-tax revenue estimates hinge heavily on assumptions about how much trading volume shrinks in response to the tax, economists and fact-checkers have found no consensus that a Wall Street speculation tax at the scale Sanders describes would raise anywhere near the $2.4 trillion he cites, making the clean $2.2 trillion cost matched by $2.4 trillion in revenue an unverified and likely overstated pairing rather than an established fact.