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Ocasio-Cortez floats 70 percent tax on rich to pay for 'Green New Deal'
January 4, 2019
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Some facts to educate those like Ms. Ocasio-Cortez:
How could it be that the tax code of the 1950s had a top marginal tax rate of 91 percent, but resulted in an effective tax rate of only 42 percent on the wealthiest taxpayers? In fact, the situation is even stranger. The 42.0 percent tax rate on the top 1 percent takes into account all taxes levied by federal, state, and local governments, including: income, payroll, corporate, excise, property, and estate taxes. When we look at income taxes specifically, the top 1 percent of taxpayers paid an average effective rate of only 16.9 percent in income taxes during the 1950s.
There are a few reasons for the discrepancy between the 91 percent top marginal income tax rate and the 16.9 percent effective income tax rate of the 1950s.
The 91 percent bracket of 1950 only applied to households with income over $200,000 (or about $2 million in today’s dollars). Only a small number of taxpayers would have had enough income to fall into the top bracket – fewer than 10,000 households, according to an article in The Wall Street Journal. Many households in the top 1 percent in the 1950s probably did not fall into the 91 percent bracket to begin with.
Even among households that did fall into the 91 percent bracket, the majority of their income was not necessarily subject to that top bracket. After all, the 91 percent bracket only applied to income above $200,000, not to every single dollar earned by households.
Finally, it is very likely that the existence of a 91 percent bracket led to significant tax avoidance and lower reported income. There are many studies that show that, as marginal tax rates rise, income reported by taxpayers goes down. As a result, the existence of the 91 percent bracket did not necessarily lead to significantly higher revenue collections from the top 1 percent.
Ocasio-Cortez suggested implementing an income tax rate of up to 70 percent on wealthy Americans. Well, she won't be in office very long with that kinda talk.
On April 18, 1977, President Jimmy Carter made a televised speech to the nation on the subject of the energy crisis.
Tonight,” he said, “I want to have an unpleasant talk with you about a problem that is unprecedented in our history.” President Carter warned his audience that at the rate they were using energy, America’s supplies of oil would dry up fast.
“If we fail to act soon,” Carter warned, “we will face an economic, social, and political crisis that will threaten our free institutions.”
Let’s see you work hard 70 80 90 hrs. a week and you get to pay more taxes because you have worked harder. Not everyone is born rich and I believe everyone should pay their fair share but the people that are getting back thousands of dollars on childcare and the ones that were minimal wage And hours by choice maybe we should tack something on to them as well. believe me I’m not rich but I don’t think it’s right to excessively tax people that have managed to do better than others.
So a person that made good choices and work hard during their education, makes sacrifices, excels at what they do. They work hard and make good choices as adults throughout their career and succeed. Maybe they started a business as an entrepreneur and worked tirelessly to succeed. These are the people she wants to penalize and tax them more? How is that even remotely logical or American? Taxes should be fair...a flat rate on all whether it is $10,000, $100,000, $1,000,000 or $10,000,000. Not a person worked harder and made more so tax them more because they have more money.
Let's call this tax increase what it is. A tax on success. It's easy to say the wealthy should pay more, but the inverse is that at some point people will stop achieving more because it won't be worth it.
Maybe someone needs to explain to Alexandria the real world and how it works. Send he the following: She wants people to pay their fair share, then have the poor pay up....
Suppose that once a week, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this...
The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
And the tenth man (the richest) would pay $59.
So, that's what they decided to do.
The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly beer by £20." Drinks for the ten men would now cost just £80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free but what about the other six men? The paying customers? How could they divide the £20 windfall so that everyone would get his fair share? They realized that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fairer to reduce each man's bill by a higher percentage. They decided to follow the principle of the tax system they had been using and he proceeded to work out the amounts he suggested that each should now pay.
And so, the fifth man, like the first four, now paid nothing (a100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving).
Each of the last six was better off than before with the first four continuing to drink for free.
But, once outside the bar, the men began to compare their savings. "I only got £1 out of the £20 saving," declared the sixth man. He pointed to the tenth man, "but he got £10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a £1 too. It's unfair that he got ten times more benefit than me!"
"That's true!" shouted the seventh man. "Why should he get £10 back, when I only got £2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up.
The next week the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important - they didn't have enough money between all of them to pay for even half of the bill!
And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy and they just might not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
For those who understand, no explanation is needed.
For those who do not understand, no explanation is possible.
Do you think the rich fellow Democrats in Congress are supportive of her "tax the rich" proposal?
how can an economics major not understand that a 70% tax rate for the people who own companies = the rich leaving the country, lower economic growth, fewer jobs, etc.
Randy The Ram
“Ocasio-Cortez’s climate plan would reduce U.S. carbon emissions to zero - and eliminate the use of fossil fuels - within 12 years”. There are so many concerns with her idea. Can the author or Occasional-Cortex explain in detail how that will be accomplished? All this article describes is gouging money from the wealthy but absolutely zero substance for how the tax is going to be applied and how they will measure the benefit. On a side note how will the the folks and small businesses with not a lot of money pay for no emission vehicles and other environmental friendly goods? Also for those that will be getting the 60-70 tax rate, what incentive to they have to stay in that tax bracket? Another question is how can businesses and individuals in the 60-70 tax bracket pay for research and development if they no longer have a budget to do so? Just think for a moment with the evolution of the cell phone. If socialism takes place, we will be stuck using our current cell and technology for the next 12 years.
the 2% pay more in taxes already than the rest of the population combined, and this is her answer to tax reform?
I'm not a trump supporter, but I find this idea unreasonable. Yes, higher income earners should contribute more, but 70% is way out of proportion. It's wrong to expect the wealthy to pay more taxes to support all the lower-income issues.
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