Jeff Dunetz has a post over at The Lid about ¡Ocasio! She Guevara’s “tax fairness” proposal. He quotes her as saying.
You know, you look at our tax rates back in the ’60s, and when you have a progressive tax rate system, your tax rate let’s say from zero to $75,000 may be 10 percent or 15 percent, etc. But once you get to the tippy-tops on your 10 millionth dollar, sometimes you see tax rates as high as 60 or 70 percent …
Uh, wrong! The 70 precent top rate on incomes above $100,000 was a holdover from the ’40 and ’50s. One of the key accomplishments of the Kennedy Administration in the ’60 was to get the top rate lowered to 50 percent as a means of stimulating economic growth. Even corrected for inflation, her imagined threshold income for the top rate is an order of magnitude higher than the ’50s value. She’s set her definition of rich too high.
In any event, her numbers don’t add up with the current distribution of incomes. Jeff includes the following table—The top marginal rate is now about 40 percent. If doubling the rate didn’t result in the rich moving more of their their assets offshore and the taxman could take twice as much money from them, one could expect about a 20 percent increase in revenue. Personal income taxes would increase 40, but personal income taxes are only about half of the government’s take. That would provide roughly 800 billion dollars a year, which would not quite offset the deficit expected before implementing She Guevara’s Green New Deal. In fact, doubling everyone’s taxes wouldn’t provide enough money to fund her schemes.
UPDATE—With her congressional pay, Ms. Occasional-Cortex will be entering the upper 5 percent of income earners. Perhaps this will provide her with the same sort of practical education experienced by other who have climbed the income ladder.