MARK ENGLER AND ANDREW ELROD - Alexandria Ocasio-Cortez’s 70% Tax Proposal Is a Great Start—But We Need to Abolish the Ultra-Rich

To combat inequality and oligarchy, we need to tax the accumulated wealth of the billionaire class, not just income.

Reintroducing high taxes on the rich seems to be popular now, even in the U.S. with 45% of Republican voters supporting the idea. Alexandria Ocasio-Cortez says the 70% tax will only kick in after someone has earned over $10 million. Wow, that's going to be some fight! 

Anyway, no more worry that some people raise about the oligarchs capturing all the MMT deficit spent money with those sort of taxes. Problem solved!

Taxing the rich is popular—and makes good economic sense

In the fallout from Ocasio-Cortez’s interview, economist and New York Times columnist Paul Krugman was quick to point out that her view of optimal tax rates was far from controversial.

A flight of prominent academics, including Nobel laureate Peter Diamond, whom Krugman describes as “arguably the world’s leading expert on public finance,” have concurred that a top tax rate of over 70 percent would be entirely reasonable. “Some put it higher,” Krugman noted. “Christina Romer, top macroeconomist and former head of President Obama’s Council of Economic Advisers, estimates [the optimal rate for the top tax bracket] at more than 80 percent.”

America indeed long had tax rates on the rich that reached the levels Ocasio-Cortez proposed or higher, while the nation experienced massive economic expansion. In fact, she understated the rates from the past: For two decades after World War II, until 1964, the marginal tax rate on the highest bracket hovered around 91 percent.

Some progressives—notably advocates of Modern Monetary Theory, a brand popularized by the economists Stephanie Kelton and L. Randall Wray—dispute the necessity of such funding. They argue the government need not be preoccupied with raising taxes, as it can comfortably borrow to stimulate the economy and make socially productive investments. But a higher tax on top earners is not just about generating revenue. Rather, taxes on the ultra-wealthy can be seen as goods in their own right, as tools for fighting runaway income inequality.

For one, raising taxes on the rich can help to lessen their disproportionate political power. Curtailing incomes over $10 million per year will help curb the ability of the rich to buy influence through campaign contributions, dark money issue campaigns, lobbying, and nonprofits aimed at undermining unions, attacking environmental regulations, or promoting further tax cuts.

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MARK ENGLER AND ANDREW ELROD - Alexandria Ocasio-Cortez’s 70% Tax Proposal Is a Great Start—But We Need to Abolish the Ultra-Rich