To finance ambitious progressive priorities like universal healthcare and free college, taxes will need to be raised on the entire top 1 percent, not just those making $10 million or more per year.
Still doesn’t cover more than 15% of those suggestions.
People have very odd views on how many rich there are, how rich they are, and statistics in general. The top 1% makes (Adjusted Gross Income) 288K and above. Putting aside for a moment that many of those live in areas where they are already paying almost 50% in federal, state, and local taxes, that simply doesn’t add up to enough money.
When Mr. Obama raised marginal rates by 4.6% in 2012 on that top 1%, the total increase to the US Treasury was @ 60 billion dollars. The ironic fact that the Superstorm Sandy cleanup was about the same amount of money escaped most in the media.
Sixty billion dollars is 1.5% of the most conservative estimates of the cost of Ocasio-Cortez’s policy proposals.
Mull that over a bit. You raise taxes on the top 1% by nearly 5%, and you only get 1.5% of the cost of the proposals. Grade school arithmetic shows you that you can’t get what you want from the rich.
The most ludicrous myth that the US left enjoys is the idea that we can have European style social welfare paid for only by the rich. We can’t. In Europe, the middle class pays (depending on where one falls in our middle income bracket) as much as 4 TIMES what they pay today. Specifically, some in our 12% marginal rate bracket would, in Europe’s far less progressive systems, pay the top 55% rate.
Now, let’s count up a few lies:
If fact, the top marginal tax rate Ocasio-Cortez floated was lower than that recommended by Nobel laureate Peter Diamond who suggested top tax rate of 73 percent in 2012 paper.
This is a lie. Diamond suggested that the all-in top tax rate on the 1% could be as high as 73%. That number included (a) federal taxes, (b) state taxes, and( c) ignores the fact that the rich also pay huge amounts in property taxes. A 74% rate on the rich effectively, when you add in state and property taxes, adds up to, well, way too much to keep capital from flying out of the country.
Sweden used to have a 93% top rate. Now, it’s 55%. There’s reason for that; they used to collect almost nothing from the 93% rate.
Good luck with that.
To put this in context, the average annual income of a CEO at a Fortune 500 company is approximately 10.5 million,
Not quite a lie, but this is way too simplistic. First off, there are only a few hundred CEOs in the country with this kind of income. A child can tell you that taxing a few hundred people at a high rate won’t get you a substantial % of the $4 TRILLION needed per year for these proposals.
Secondly, CEO’s don’t have Adjusted Gross Incomes of 10 million, at least not often. CEO’s get paid salaries of about million a year. The rest comes in the form of stock options, which are not taxed until sold. So, basically, the CEO holds on to their stock until they need to sell it, OR they leave it to their heirs, OR they donate it to charity.
Bottom line? You aren’t able to tax but a fraction of that income.
But to lay the groundwork for tax reform, presidential candidates and rank and file democrats must also take a stance on how they would reform the current tax policy regime.
Yes, and lets be clear. The US already has the most progressive system in the world. The tax proposals being made put our taxes not just the highest in US history, but the highest in the WORLD.
I suggest we not experiment with insanity.
For 99 percent of Americans, increasing to top marginal tax rate would have zero effect on their bottomline.
Of course. But the fact is that you will only get about 16% of what is needed from those proposals.
The rest comes from taxes on the middle class, primarily.
Let;s end the lies and put our cards on the table, shall we?