Democratic debate: Bernie Sanders really isn't as "socialist" as President Eisenhower

Vermont Sen. Bernie Sanders earned laughter and applause during Saturday's Democratic debate for a line defending his progressive tax policy.

When asked how he would pay for proposals like tuition-free college for Americans, Sanders said he would finance them by "due-demanding: that the wealthiest people and the largest corporations - have gotten away with murder for years - start paying their fair share."

CBS News Congressional Correspondent Nancy Cordes pressed the White House hopeful: "Let's get specific. How high would you go? You've said before you'd go above 50 percent. How high?"

"We haven't come up with an exact number yet," Sanders responded. "But it will not be as high as the number under Dwight D. Eisenhower which was 90 percent."

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As an aside, he said, to loud cheers in the audience: "I'm not that much of a socialist compared to Eisenhower."

Sanders went on to say that his administration would "end the absurdities as Warren Buffet often reminds us - that billionaires pay an effective tax rate lower than nurses, or truck drivers that makes no sense at all. There has to be real tax reform and the wealthiest and the large corporations will pay when I'm president."

In fact, during the first term of Republican President Eisenhower, the marginal tax rate on regular income for those earning over $400,000 -- at the time, the highest income bracket -- was 92 percent. The tax rate was carried over from Democratic President Harry Truman's administration. This was the second-highest tax rate during the 20th century, following the 94 percent instituted by President Roosevelt during World War II for those making over $200,000 annually.

In 1954, under Eisenhower, the rate for the highest income bracket decreased to 91 percent.

Taking into account these income tax rates, Sanders' assertion that he's not as "socialist" as Eisenhower's administration is correct: Sanders has said before that he doesn't believe his tax policy would tax the top bracket over 90 percent, though he has yet to offer up an exact number.

Appearing on "CBS This Morning" in September, Sanders said "We are going to ask the wealthiest people in this country who are doing phenomenally well, and many large corporations that are making billions of dollars of profits and not paying a nickel in taxes, to in fact start paying their fair share of taxes."

When asked to specify, the Vermont senator said of taxing those in the highest income bracket, "I don't think you have to go up to 90 percent."

Sanders, however, has also called for greater increases in capital gains taxes, which were capped at 25 percent during most of Eisenhower's tenure.

During Saturday's debate, former Maryland Gov. Martin O'Malley also defended asking the wealthy to pay a higher share of taxes.

"Under Ronald Reagan's first term, the highest marginal rate was 70 percent," he pointed out.

O'Malley is also correct on this point: Under President Reagan, those with annual incomes over $215,400 were taxed at a rate of 69.1 percent.