*By Carlo Versano*
When freshman Democratic Rep. Alexandria Ocasio-Cortez floated the idea to Anderson Cooper on "60 Minutes" Sunday that the very wealthy pay a marginal tax rate as high as 70 percent, it got pundits and politicians all worked up. What exactly was the newly-elected, self-proclaimed radical proposing?
But as it turns out, a higher marginal tax rate is not particularly radical in the context of American history. Marginal tax rates, in which taxes increase as income rises, were as high as 90 percent under President Eisenhower, and were above 50 percent up until the second Reagan tax cut.
But according to Kyle Pomerleau, an economist at the Tax Foundation, a nonpartisan, business-friendly think tank, higher marginal rates do not bring in the promised revenue, and instead are an example of "the worst of both worlds."
Ocasio-Cortez's policy would "distort behavior" as individuals in the highest brackets would find ways to skirt the system. One of the ways they would do that, Pomerleau said, would be to stop selling assets defined as capital gains, which make up the majority of the taxable income at the top of the ladder and are only taxed when they're sold. "The amount of taxable realizations will plummet," Pomerleau said.
The safety net programs that progressives like Ocasio-Cortez seek to strengthen, like Medicare and Social Security, are better funded through other forms of taxation, Pomerleau said, such as a payroll tax, or the European model of sales, payroll, and value-added taxes. But the bottom line, he said, is that "everyone is going to have to pay higher taxes."
That is not a foregone conclusion. Those who advocate for very high marginal tax rates on the wealthy include some respected economists, including Nobel Prize-winner Peter Diamond. Diamond has estimated the top tax rate should be [73 percent](https://www.aeaweb.org/articles?id=10.1257/jep.25.4.165), while a pair of Berkeley economists have put it as high as [80 percent](http://ceg.berkeley.edu/research_117_2123314150.pdf).
Or as Paul Krugman [put it](https://www.nytimes.com/2019/01/05/opinion/alexandria-ocasio-cortez-tax-policy-dance.html?action=click&module=Opinion&pgtype=Homepage) on Monday: "The optimal tax rate on people with very high incomes is the rate that raises the maximum possible revenue."
At the very least, Ocasio-Cortez's ideas about the marginal tax rate, given that she has such an outsized megaphone within the Democratic Party at the moment, signals that Democrats are getting "more serious" about progressive income taxation, Pomerleau said.
And both sides can agree that the individual tax code is in need of simplification, he said. "There's still a lot of work to be done to fix that."
For full interview [click here](https://cheddar.com/videos/ocasio-cortez-calls-for-radical-income-tax-reform).
The Trump administration has asked an appeals court to remove Lisa Cook from the Federal Reserve’s board of governors by Monday, before the central bank’s next vote on interest rates. Trump sought to fire Cook Aug. 25, but a federal judge ruled late Tuesday that the removal was illegal and reinstated her to the Fed’s board.
President Donald Trump's administration is appealing a ruling blocking him from immediately firing Federal Reserve Gov. Lisa Cook as he seeks more control over the traditionally independent board. The notice of appeal was filed Wednesday, hours after U.S. District Judge Jia Cobb handed down the ruling. The White House insists the Republican president had the right to fire Cook over mortgage fraud allegations involving properties in Michigan and Georgia from before she joined the Fed. Cook's lawsuit denies the allegations and says the firing was unlawful. The case could soon reach the Supreme Court, which has allowed Trump to fire members of other independent agencies but suggested that power has limitations at the Fed.
Chief Justice John Roberts has let President Donald Trump remove a member of the Federal Trade Commission, the latest in a string of high-profile firings allowed for now by the Supreme Court.
President Donald Trump has fired one of two Democratic members of the U.S. Surface Transportation Board to break a 2-2 tie ahead of the board considering the largest railroad merger ever proposed.
The Rev. Al Sharpton is set to lead a protest march on Wall Street to urge corporate America to resist the Trump administration’s campaign to roll back diversity, equity and inclusion initiatives. The New York civil rights leader will join clergy, labor and community leaders Thursday in a demonstration through Manhattan’s Financial District that’s timed with the anniversary of the Civil Rights-era March on Washington in 1963. Sharpton called DEI the “civil rights fight of our generation." He and other Black leaders have called for boycotting American retailers that scaled backed policies and programs aimed at bolstering diversity and reducing discrimination in their ranks.
President Donald Trump's administration last month awarded a $1.2 billion contract to build and operate what's expected to become the nation’s largest immigration detention complex to a tiny Virginia firm with no experience running correction facilities.
Cracker Barrel said late Tuesday it’s returning to its old logo after critics — including President Donald Trump — protested the company’s plan to modernize.
Donald Trump has a message for critics who think turning the U.S. government into a major stockholder of Intel is a “socialist” move: More is coming.
Federal Reserve Gov. Lisa Cook's lawyer says she'll sue President Donald Trump's administration to try to prevent him from firing her. Longtime Washington attorney Abbe Lowell said Tuesday that Trump “has no authority to remove” Cook. If Trump succeeds in removing Cook from the Fed's board of governors, it could erode the Fed’s political independence, which is considered critical to its ability to fight inflation because it enables the Fed to take unpopular steps like raising interest rates. The Republican president said Monday he was removing Cook because of allegations she committed mortgage fraud. Cook was appointed by Democratic President Joe Biden in 2022 and says she won't step down.
Federal Reserve governor Lisa Cook late Wednesday said she wouldn’t leave her post after Trump on social media called on her to resign over an accusation from one his officials that she committed mortgage fraud.
