Are Alexandria Ocasio-Cortez's Tax Views That Far Out of the Mainstream?
*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).
Ayman Mohyeldin, host of MSNBC Original Podcast 'American Radical,' joins Cheddar News to discuss how the podcast chronicles a woman's path to the insurrection.
Following the attack on the Capitol last year, several major corporations promised to no longer pour funds into the campaigns of Republican lawmakers who supported the January 6 insurrection. But not all have stood firm on their word. Among those that did keep to their promise were Nike, American Express, and Walgreens.
Rep. Annie Kuster (D-N.H. 2nd District) joined Cheddar's "Between Bells" to reflect on the January 6 insurrection and her personal experience in the Capitol when rioters attempted to overtake the House chamber. "What I now understand to be true is that the mob of rioters had reached the third floor and was literally in the hallway running toward us as we ducked into the elevator," she told Cheddar. Kuster recalled the fear she felt, wondering what might have happened if the insurrectionists crossed paths with her group. Kuster noted that she has since received therapy to help cope with the traumatic event. "A thousand acts of courage saved our life and saved our democracy," she said.
Andy Kroll, Washington bureau chief at Rolling Stone, joined Cheddar's Baker Machado to discuss the anniversary of the January 6 insurrection and how it could impact upcoming elections. Kroll talked about whether or not Trump's influence will aid Republicans in the midterms and how it could be a setup for the former president to run in the 2024 presidential election. "This day has become really almost a kind of cause for Republican base voters," he said. "And you're going to see that fueling some turnout, you're going to see that fueling, even, candidates running for office in these midterm elections."
According to a recent analysis from ProPublica and the Wall Street Journal an analysis of Facebook posts, internal company documents, and interviews reveal key evidence about the social media giant's role in January 6 insurrection. National Reporter at ProPublica Craig Silverman, joined Cheddar to discuss more.
AT&T and Verizon have agreed to delay activating their 5G services for two weeks after Airlines for America, a lobbying group that represents American, Delta, and other airlines, filed a petition last week with the FCC to stop the deployment of 5G in the U.S. over concerns that the network can interfere with certain systems on airplanes. President Biden spoke out about it, saying it would avoid further delays and cancellations of flights. Light Reading 5G and Mobile Strategies Director Mike Dano joined Cheddar News' Closing Bell to discuss.
On a day where the Dow and Russell 2000 each closed more than 3% lower, Melissa Armo, founder and owner of The Stock Swoosh, says Wednesday's big sell-off could extend into after-hours trading. She joined Cheddar News' Closing Bell for more.
The new year has just gotten underway, but the clock is already ticking for the Democratic-led Congress to pass bills regulating big tech. Evan Greer, Director for Fight For the Future, joins Cheddar News to explain why Democratic lawmakers would want to push legislation now, and what a Republican takeover would mean for the industry.
Americans looking to purchase at-home COVID-19 tests will now have to shell out a bit more money after an agreement expired between the White House and companies to sell the tests at cost. The price of Abbot's BinaxNow test kit from October to December was $14 apiece; on Tuesday, Walmart's website listed the test for $19.88, and Kroger listed the tests for $23.99. Carbon Health Regional Clinical Director Dr. Bayo Curry-Winchell joined Cheddar News' Closing Bell to discuss the impact higher prices will have as the nation experiences another surge in cases.
