Ocasio-Cortez Floats 70 percent Tax on the Super Wealthy to fund Green New Deal

https://www.mediaite.com/tv/alexandria-ocasio-cortez-calls-for-super-wealthy-to-be-taxed-70-to-fund-green-new-deal/

Rep. Alexandria Ocasio-Cortez sat with Anderson Cooper for an upcoming 60 Minutes interview set to air this Sunday, a portion of which has been released as a promotion. In the released segment, Ocasio-Cortez reveals how exactly she suggests paying for the environmental agenda known as the “Green New Deal” — with remarkably higher tax rates for the super wealthy.

Ocasio-Cortez suggests in the clip that in her esteem, people should be doing more to pay their “fair share.” When Cooper pressed on how she could possibly pay for the deal, she pointed to the progressive tax rate system in the 1960s, explaining that if you earn 0 to $75,000 a year, you would only pay 10% or 15% in income tax.

She continued:

“But once you get to the tippie tops, on your $10 millionth, sometimes you see tax rates as high as 60% or 70%. 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.”

Cooper replied that she was proposing a “radical agenda.”

“If that’s what radical means, call me a radical,” she said.

The newly elected New York representative has quickly become something of a lightning rod of attention for people of all political stripes, so this suggestion is certain to get as much attention as the recently revealed and viral clip of a teen-aged AOC doing a Breakfast Club style dance on a rooftop.

Who is going to be watching 60 minutes this Sunday?

I'll take "Shit that will never happen" for 100, Alex.

I expect most people to not realize what she means and how this will work.

A 70% bracket at 10 million or so doesn't mean you pay 7 million in taxes and left with 3 million if you earn 10 000 000 $ However what you earn from 10 000 001 and above will be taxed like that.

Chalk this up there with the fact that she thinks funding 2/3 of a medicare-for-all program could be done with a Pentagon accounting error.

This is bartender economics at it's best. Say nice things with a pretty smile, and money will come out of nowhere.

btw, the energy sector has cut emissions by 28% since 2005. Total US carbon emissions are at a 67 year low. We are exceeding our PCA agreements, despite not being in it anymore.

I'm looking forward to contrasting plans calling for higher marginal rates with those calling for cuts to social security and medicare.

Why not? We did this back when America was "great". Heck, it was 90% until the 60s.

Nobody actually paid that much. Back then, you were allowed to deduct depreciation on loans and real estate. The effective top tax rate was around 45%, and adjusted for inflation, it applied to people earning $3.2M.

what is with all the low effort threads?

By design nobody would be paying 90%. If only counting last dollar earned, then yeah 90%(or 91) is correct, but not for the whole paycheck.

But think about all those jobs that wouldn't be created.

Yeah, I'm having nightmares about it. Due to trickle down economics, jobs are just pouring down from the sky here. I'm surprised the nation still works with all the jobs that popping up on every corner here. Hell we need a completely open border to deal with these jobs. There is so many of them, I don't know what to do. I was like offered a new job for every item I bought in the store the other day.

Break a leg everyone. :P

@drlostrib: Middle of the day with people posting from their phones, I suspect.

All of that is true, and would be true if done today as well. Wealthy people have the money to pay accountants to find tax loopholes for them. Right now the top tax bracket is 37%, but most people in that bracket pay closer to 20%. This doesn't change my point that we should raise taxes on the wealthiest people. If anything I'd say it's an argument in favor of doing so.

Eliminating a majority of loopholes instead would also make sense, but as the Tax Cuts and Jobs Act showed us, that is even harder to get through congress than a tax hike.

The EPA statement that I'm guessing you're referring to was based on data up to 2016. Either way, Trump policy would not have had much impact yet.

Emissions will probably continue on a downward trend though. Solar and wind are cost competitive now, and advances in efficiency will continue. Plus, despite his pledge to support coal, there isn't much he can do other than put bans on fracking. And that ain't gonna happen.

I know what she is trying to do but it's too much, too soon, from someone who is too much of a "noob" at politics.

I'd rather she try to plug the holes in corporate tax law and such than go after individuals like that.

Preparing for lack-of-context induced outrage in 3...2...1...

Honestly I think Ocasio-Cortez might be too smart for her own good, she overestimates the herd mentality of the American public. Not to say that we as individuals are dumb, but when you group us all up and factor in the notion we often feel like we have to choose an extreme, yeah, she is going to be taken out of context.

Also every American still seems to think they are going to be rich some day, and therefore vote against things like this.

The curve only points downwards. Cut cut cut, never increase.

All out war on coal is what is needed. The US is a good example in that the large majority of the net emissions reductions that have occurred in the past 10-15 yrs have come from the collapse of coal in the US due to the shale revolution in N America and a sharp downward cost curve for renewables.

Coal is on life support in the US and even intransigent companies like Duke Energy are now planning on phasing out their coal plants.

The next biggest issue is oil for light transportation. The auto industry has already decided to invest enmasse in electric. Now it is up to consumers to reward that investment by buying electrics.

Solve those two issues on a global basis and you solve enough of the emissions problem to meet the targets.

I would support a taxation solution as long as the money is earmarked for the problem. Plow it all back into electricity generation and electric vehicle discounts/rebates and you have a winning strategy.

@judaspete: Fracking is by far the biggest contributor to our drop in carbon emissions, but you're right that this has very little to do with Trump. One of the few things I give Obama credit for is he stood out of the way of energy expansion.

Believing that governments are going to be the ones to combat climate change is pretty misguided in general. Even the UN has admitted that it's going to be consumer choice that will be the leading factor in climate change, not government policy, at least in the west.

@Damedius:

It's not radical, just basically what was the law until Ronald snake Regan came into power. I believe the top tax rate was at 90% for nearly 40 years before Regan stepped in to office.

@blaznwiipspman1: That would hurt the economy. And no torture. Period

They can push for something, try to change consumer behaviour.

President Kennedy lowered the tax rate.

Check on Obama and energy. His regulations on energy development were terrible. He was against any fossil fuel. He gave millions of dollars for green energy which produced no return on the money spent.

There is not enough wealth among the wealthy to pay for this pipe dream.

I'll give her one thing: She certainly has delusions of grandeur.

@Solaryellow: I don't think so. What she's proposing isn't even new. Grandeur means doing something unprecedented. The 70% top tax rate is nothing new or grand....it was at 90% when FDR was president and stayed like that for the next 40 years until Regan came into power and shat on the government. Him and JFK both.

I don't mind tax cuts, but when you start giving away commie protections at the same time, then you crossed a line. You can't have both, choose one or the other. 90% tax rate and you keep the protections, or 10% tax rate and you lose most protections. And by protections I mean the patent laws, the trademarls, contract laws, so called intellectual property, etc etc.

He did a really crappy job of it, then. Outside of coal which is declining for economic reasons, production was up during his tenure.

Um, you forgot to mention all the methane leaks that is a much more dangerous greenhouse gas. Also find it amusing that people are holding AOC to these impossible standards, that she MUST be PERFECT on everything, and not make a SINGLE mistake, or else she is dumb as a bag of rocks! You are a joke.

To readdress the OP and discuss the merits of such a proposal, the American Economic Association previously released a paper arguing that the optimal top marginal tax rate was 73 percent.

We argue that a result from basic research is relevant for policy only if 1) it is based on economic mechanisms that are empirically relevant and first order to the problem, 2) it is reasonably robust to changes in the modeling assumptions, and 3) the policy prescription is implementable (i.e, is socially acceptable and not too complex). We obtain three policy recommendations from basic research that satisfy these criteria reasonably well. First, very high earners should be subject to high and rising marginal tax rates on earnings. Second, low-income families should be encouraged to work with earnings subsidies, which should then be phased-out with high implicit marginal tax rates. Third, capital income should be taxed. We explain why the famous zero marginal tax rate result for the top earner in the Mirrlees model and the zero capital income tax rate results of Chamley and Judd, and Atkinson and Stiglitz are not policy relevant in our view.

She’s an inarticulate moron. I’ve seen her interviewed on a few occasions and she has no clue what she’s talking about and can’t even form responses.

Her Twitter tirades are equally dumb.

https://youtu.be/4fsRlt2Q0zo

https://www.sciencemag.org/news/2015/03/methane-drinking-water-unrelated-fracking-study-suggests

AOC is a gaffe queen. She also has childish spats on twitter regularly. She's like a commie hybrid of Palin and Trump.

I guess competence is an impossible standard these days.

@mattbbpl: it would be great but many would just pack up and move elsewhere. Other countries will just lower their top tax rates to attract these people.

If you also prevented citizens from doing business in the US if they decide to move then it would make more sense but yeah, it would be a mess.

Best thing in my opinion is to lower the tax rate and then remove all government/court protections. This includes patent laws, trademarks, Intellectual properties, unreasonable contract laws, etc etc. This would automatically take care of the so called rich people. When the rich lose government protections, the first thing that happens is the amount of competition in the free market skyrockets. When that happens it's great news for the middle class and the poor in terms of jobs AND lower prices. The bottom line, government and the courts are screwing over the people. Get rid of them, gut them and only let them be responsible for regulating environmental protections, then the world will change for the better.

I actually think some resources should not be privatized either. Mostly shared resources that everyone depends on. Air waves for telecommunication are one example. This would be better off in the owner ship of the government with leases being rented out to private corporations.

Honestly, Trump kinda beats her in all of this.

So using intelligence, and logic to crush your enemies is considered a bad thing now? Unlike trump, she actually knows what the hell she is talking about.

Raise taxes on the rich bastards, then enact protection laws, put massive tariffs on american goods manufactured outside the country, and force them to bring jobs, and goods back into the US. Don't let them win.

I don't mind someone who is rich and successful. They work hard and they achieved something amazing. What I have a huge problem with, is the government protections that they 1000% used to be as succesful as they did. Government protections, subsidies, welfares etc etc...things that shouldn't exist and things that I will never agree with. You want a big government...I strongly disagree for one reason. People are corruptible scum bags and for that reason alone government should be minimized wherever possible so that power isn't concentrated. The only power I support the government or the courts is to regulate the environment, because it has a cost that should be factored into the free market.

Perhaps have a progressive tax system on capital gains.

Interesting. I might go through it in more detail later but the first snippet I found interesting is that this 73% is found using the elasticity of 0.25 for 'Net of Tax' ratio (what is this ratio?). I would need to see how this relationship was first settled since it relies heavily on it previous papers. Seems to be a lot going on which is above my pay-grade. Good find.

Looks like Krugman threw in his 2 cents. (Citing paper Matt referenced earlier?)

I think it's time we re-evaluate these topics and stop seeing a number and scaring others with out context or understanding of how a marginal tax rate works. I've found that 9/10 people don't understand bracketing systems and assume all their money is treated equally.

Oh boy, the first comment there is gold.

The problem with elitists like Dr. Krugman is that they believe in things like actual data and evidence, peer-reviewed research, mathematics and statistics, logical reasoning, and even common sense on occasion.

When will these elitists start thinking like real Americans, i.e. the people who live in shriveling rural towns and rusted out indistrial cities?

Who needs to understand all those complicated charts and numbers, when we have Fox News and Rush Limbaugh to tell us what it all really means!

Why would we want to be like those Socialists in Scandinavia or Canada, and pay half our income in taxes? Who cares if they get free healthcare from their government; they don't have all the choices of insurance options like we do!

I bet that their socialist healthcare systems wouldn't even cover our opioid addictions and Black Lung Disease.

And who cares if they call themselves the happiest countries in the world; you can't be happy unless you get to carry a concealed weapon like we can!

Besides, anything you tell is is just fake news made up by the Deep State (which is secretly run by George Soros from the basement of a pizza joint).

We're perfectly happy with the way things are! Keep sending us our food stamps and disability checks (paid for by taxes collected from those elitist Socialist Blue states on the coasts). Don't mess with our system!

@HoolaHoopMan: Net of tax is simply net after-tax income. This is commonly used to differentiate between Net Income (Gross Income - Expenses) and Net Income After Taxes ([Gross Income - Expenses] * Tax Rate)

NetOfTaxIncome = GrossIncome - (GrossIncome * TaxRate) = GrossIncome (1-TaxRate)

Gotcha. So the 'stretchiness' of this value would need to be incredible high for our top marginal rates as of now to be effective (42.5% is what they peg it at). At least this is what I took away from a quick run down earlier.

Are you familiar with the meaning of "delusions of grandeur?" The saying applies to her.

@Solaryellow: maybe. Well I do disagree with her way of thinking. It's idealistic and doesn't take into consideration human behavior. My way is far more reasonable.

By the math of the authors that's correct. The elasticity would have to be very high for 42.5% to be the optimal top marginal tax rate.

The current rate, 42.5 percent, would be optimal only if the elasticity e were extremely high, equal to 0.9.

You don't want to punish people who have achieved the American dream with a 70% tax. If you tax the most rich & successful in America that badly, they'll leave the country and take their business with them and our economy will suffer. You want ceo's, innovators and business owners to always have the most money because they use that money to reinvest into new businesses. You're supposed to reward people who have achieved the American dream, that way people are motivated to always pursue the American dream.

The rich deserve lower taxes so they can use that money to reinvest into new businesses and new innovations. Why do you think America is #1 in the world? It's because we reward the rich and we don't punish them.

You can always move to Canada or Europe if you don't have what it takes to compete in America and there's nothing wrong with that.

Or you can hire other people if they leave...............

You don't want the super rich to leave your country. They're the movers and shakers of the world. I've worked with two small CEO's side by side. The way they think and the way they embrace their vision is truly inspiring. They have something the common man does not. It's important to keep them in America, not drive them away.

I'm considered middle class. I don't want to pay higher taxes in the name of socialism. It's not fair that I have to pay for other peoples medical insurance with my tax money. I'm not unreasonable though.

1. I don't mind my taxes helping pay for kids medical insurance if they have no parents.
2. I don't mind my taxes helping the disabled
3. I don't mind my taxes helping the retired who have paid a life time of taxes.

As a minority I enjoy a vast amount of privilege in America, more than whites.

I can meet the CENTER-LEFT half way on certain issues, but the far leftists like Alexandria Cortez are a bit too extreme for me.

I'd prefer seeing a REALISTIC combo of both tax cuts and spending cuts but we know our politicians can cut reasonably and responsibly spend money.

No they are not. Most of the super rich are inherited money that is invested for themselves and their families. As we see every time the trickle down tax cuts happen.....the rich get richer. The middle and lower class do not improve. That's a fallacy spread by the wealthy and you are naive enough to believe it. Learn history.