It’s not yet a policy proposal, but Rep. Alexandria Ocasio-Cortez (D-NY) is taking to 60 Minutes to float a change to marginal tax rates to help offset the costs of Green New Deal programs.
She points to progressive tax rates in the 1960s and ’70s as the model for her proposal, which would put the very highest earners in a tax rate of 70 percent for any income above $10 million.
President Ronald Reagan slashed tax rates for the wealth ih the 1980s, and in the decades that followed, median income-earners saw their wealth stagnate, while the highest earners pooled a gargantuan share of the country’s wealth. Currently, 90 percent of America’s wealth is concentrated in just 160,000 households.
Few rookie members of Congress have put such bold ideas on the national agenda and stirred up as much controversy as Alexandria Ocasio-Cortez who supports a #GreenNewDeal and says, “only radicals have changed this country.” https://t.co/2EBVY5OWLh pic.twitter.com/KihXYpC6eS
— 60 Minutes (@60Minutes) January 4, 2019
A marginal tax rate of 70 percent, as Ocasio-Cortez says, would impact a small number of ultra-high earners — not all taxpayers currently in the highest brackets.
Just 16,000 Americans earn $10 million or more, as of 2016. A rate of 70 percent would nearly double the current tax rate for this high-earners.
Republicans are up in arms, especially after their 2017 tax cuts included huge cuts for high earners and corporations. Conservatives, including House Minority Whip Steve Scalise (R-LA), are mischaracterizing the marginal tax rate as an across-the-board tax raise.
You’re the GOP Minority Whip. How do you not know how marginal tax rates work?
Oh that’s right, almost forgot: GOP works for the corporate CEOs showering themselves in multi-million💰bonuses; not the actual working people whose wages + healthcare they’re ripping off for profit. https://t.co/R1YIng2Ok1
— Alexandria Ocasio-Cortez (@AOC) January 6, 2019
The Green New Deal is still a concept — effectively an agreement on the need and desire to address climate change and income inequality together.
Neither Ocasio-Cortez nor its other supporters probably have enough of a grasp on the details to determine how much money they would have to raise, or even whether the funds would have to come from revenue. The original New Deal, for example, did not raise revenue (the economy was so crippled, there was little to raise anyway).
Despite research showing Ocasio-Cortez’s policy idea is actually pretty moderate (and there is research showing it may be on the low end of such a progressive tax policy), conservatives are mischaracterizing the idea, and calling it politically damaging for Democrats.
Ocasio-Cortez herself explained it more fluently than her opponents. A 70-percent marginal tax rate “doesn’t mean all $10 million are taxed at an extremely high rate,” she explained to Anderson Cooper on 60 Minutes. “But it means that as you climb up this ladder you should be contributing more.”