Congresswoman Alexandria Ocasio-Cortez (D-New York) has proposed a 70% tax rate on the “super wealthy” to fund her “Green New Deal.” Ocasio-Cortez has become a popular progressive leader ever since she defeated a member of Democratic leadership in the primary last year. The “Green New Deal” is the name of her agenda which covers everything from single-payer healthcare to outlawing fossil fuel use.
From the Washington Examiner:
Freshman congresswoman Alexandria Ocasio-Cortez, D-N.Y., suggested that the highest earners in America should pay tax rates of 60 to 70 percent to help pay to fight climate change.
“People are going to have to start paying their fair share in taxes,” Ocasio-Cortez told “60 Minutes” in an interview that will air Sunday. “[O]nce you get to, like, the tippy tops – on your 10 millionth dollar– sometimes you see tax rates as high as 60 or 70 percent. That doesn’t mean all $10 million are taxed at an extremely high rate, but it means that as you climb up this ladder you should be contributing more.”
The “Green New Deal” itself is very vague, but generally speaking, it is a goal to transition the U.S. to 100% renewable power by 2030. In addition to its ambitious goals on climate and energy, it includes provisions such as government-run single-payer healthcare and government jobs guarantee.
Here’s a brief clip of AOC summarizing her views:
This short Alexandria Ocasio Cortez clip has it all.
– 70% income tax for "tippy tops" income earners
– Elimination all fossil fuel
– Elimination all carbon emissions
– Force all Americans to drive electric cars
– Compares herself to Lincoln freeing slaves
— Benny (@bennyjohnson) January 4, 2019
The top tax rate was used to be as high as 91%. But the Tax Foundation has some interesting data from way back then.
- In 1960, the top 1% of households earned 9% of all income, and paid 13% of all taxes. (In 2008, the top 1% earned 20% of all income, and paid 38% of all taxes.)
- The top marginal tax rate in 1960 was 91%, which applied to income over $200,000 (for single filers) or $400,000 (for married filers) – thresholds which correspond to approximately $1.5 million and $3 million, respectively, in today’s dollars. Approximately 0.00235% of households had income taxed at the top rate.
- A taxpayer at the very bottom of the top 1% (in other words, one who is right on the boundary between the 98th and 99th percentiles) had a nominal income of $24,435, or about $190,000 in today’s dollars. (In 2008, this figure was nominally $380,354, or $400,000 in current dollars.)
Here’s some more information from Brian Riedl of the Manhattan Institute:
Those romanticizing 91% income tax rates under Eisenhower, take note:
1) High income thresholds & loopholes shielded most, thus:
1) 1950s revenues (%GDP) were lower than today
2) Top 1% paid *lower* actual income tax rates than today
3) Only 8 taxpayers paid the 91% rate in 1960.
— Brian Riedl (@Brian_Riedl) January 4, 2019
The only reason why the American economy was able to sustain such high tax rates was that the rest of the industrialized world was still in ruins from the Second World War. There was literally no one else in town, economically.
Also, things like the internet which make capital flight and tax avoidance much easier now did not exist back then. It’s hard to see how the U.S. government could raise any substantial revenue from a 70%+ tax rate, let alone enough to pay for such an ambitious project.
There are only one of two explanations for AOC. The first one is that she really is an idiot who believes this stuff. The second one is that she is lying for political gain. Neither explanation makes her look good.