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Ocasio-Cortez Says 70% Ultra-Rich Tax Could Pay for Climate Plan

49 points by rhegart 8y ago

beepboopbeep 8y ago
I would not shed a tear over this.
- Justsignedup 8y ago
  I think the % of it passing is close to 0 :( but it is a great thought
- robotrout 8y ago
  The original income tax was also promised to be only a tax on the rich. These things have a way of finding the non-rich eventually. Also, remember in 1970, the bank secrecy act put in place a $10,000 threshold for deposits or withdrawals, that were not reported on a "suspicious activities" list. This is also where we got the $10,000 travel disclosure rule. You will note that in 50 years, that threshold has not budged, putting non-wealthy people and transactions under the microscope. These laws are not adjusted for inflation, and we all expect there to continue to be inflation at the current or even an accelerated rate.
  - sharemywin 8y ago
    Most tax brackets are adjusted every couple of years for the average person. doubt it's becomes an issue for tax brackets.
microcolonel 8y ago
"Ultra-Rich" and "Could" are going to have to be refined as ideas; bearing in mind that a) the proportion of GDP which goes to taxes has not changed in any great measure for a very long time, including since the top marginal tax rates were already that high (though the bracket was... pretty high, and other factors reduced its purpose), and b) the U.S. already has the most progressive income taxes in the developed world as far as I can tell. I know it's fashionable these days to play on people's resentment for "the rich" (however that is conveniently defined at the time), but this is budgetary advice from somebody who didn't think far enough ahead to budget her first month of rent in DC (or find a roommate), and who once said that the reason unemployment is low is that "everyone is working two jobs". If you want a progressive policy, this person is not likely to be able to hold that policy's basic premise in her head, let alone any important details. I'm not a progressive, but surely it's easy to see how a Tulsi Gabbard, for example, is actually likely to produce some form of meaningful policy on at least some issues, whereas AOC mostly relies on desperately clawing to relevance through cheap popularity stunts and gaffes.
paulcole 8y ago
Get elected. Say something you know will never happen to excite your base. String them along for years. Get elected again. They said she was an outsider but she sure is learning fast.
- lghh 8y ago
  So she's just not supposed to start talking about ideas?
  - AnimalMuppet 8y ago
    Maybe it would be more useful to talk about ideas that have an actual chance of being enacted.
    - bryanlarsen 8y ago
      She's just reframing the debate. Once people realize how much support there is for a 70% tax bracket at the top, they'll be happy if it's "only" 50%.
      - AnimalMuppet 8y ago
        Hmm. When you put it that way, I seem to recall a certain President Clinton doing something similar, and he was a pretty shrewd politician. Even if you don't scare the top earners into going along, you at least challenge the default of leaving things as they are, and you challenge it in the direction you (the politician) want to go.
gkoberger 8y ago
Agree or disagree, there's a few things this article left unclear. First, the US has a progressive tax code. So, you wouldn't be taxed 70% on your entire income, only the money over a certain amount. Plus, due to deductions and other loopholes, nobody will actually pay this full amount. Secondly, this rate isn't a new idea. It was 94% under FDR (democrat) and 91% during the Eisenhower (republican) administration, and both resulted in times of prosperity. And it was 70% as recently as the 80s.
- lghh 8y ago
  The first point was mentioned in the article.
  - gkoberger 8y ago
    It does include the quote "That doesn’t mean all $10 million are taxed at an extremely high rate", however it wasn't explained for anyone who's unfamiliar with our system.
- adventured 8y ago
  > and both resulted in times of prosperity Both occurred during (some) times of prosperity. That's an entirely different premise than giving the tax rate credit for the prosperity. FDR never once saw sustained economic prosperity during his tenure in office. That isn't a statement on his policies, rather, his time in office coincided with the great depression and WW2. He died before the post war boom took hold.
- antisthenes 8y ago
  Did prosperity occur specifically because of the tax rates, or because of unprecedented before scale and use of fossil fuels per capita before the crisis of 1973?
candiodari 8y ago
Man, that article is very light on actual content.
jakelazaroff 8y ago
To put this in context, a 70% rate on the top marginal income tax bracket is not unprecedented, or even high by historical standards [1]: > Sanders said income tax rates under Eisenhower were as high as 90 percent. > A look through the records shows that top earners in the eight years of Eisenhower’s presidency paid a top income tax rate of 91 percent. It was even a bit higher before he took office. > We rate Sanders’ statement True. [1] https://www.politifact.com/truth-o-meter/statements/2015/nov/15/bernie-s/income-tax-rates-were-90-percent-under-eisenhower-/ https://www.politifact.com/truth-o-meter/statements/2015/nov...
- kansface 8y ago
  > income tax rates under Eisenhower were as high as 90 percent. Climate change is not WWII.
  - Daishiman 8y ago
    No, it is actually much, much worse.
  - kenforthewin 8y ago
    You're right - the stakes are much higher with climate change.
    - kansface 8y ago
      Sure, but they are not imminent (what is the pearl harbor of climate change?). Further, climate change is highly politicized whereas WWII mobilized the entire country in purpose.
      - InitialLastName 8y ago
        > what is the pearl harbor of climate change? I'd say Katrina, Sandy, Irene, Maria, Camp, Woolsey, and Mendocino, but if you're not convinced already you'll never be.
      - 8y ago
e40 8y ago
70% was the highest tax rate in 1980, so this is not as insane as it might seem on the surface. https://upload.wikimedia.org/wikipedia/commons/8/8c/Historical_Marginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpg https://upload.wikimedia.org/wikipedia/commons/8/8c/Historic...
- thatswrong0 8y ago
  IIRC the _effective_ tax rates that the top 1% pay haven’t really varied much over the past half a century.. it’s always hovered around 30-40%: https://files.taxfoundation.org/20170804133536/Average-Effective-Tax-Rate-on-the-Top-1-Percent-of-U.S.-Households.png https://files.taxfoundation.org/20170804133536/Average-Effec... Note I just grabbed the first google result, may be inaccurate / biased
umvi 8y ago
Diminishing returns sounds like a good idea on paper, because then the richer you get, the more you contribute. But remember that the people who are experiencing the diminishing returns aren't going to like it (besides Warren Buffett) and will probably fight against it. It's a bit of a conundrum. The richer you get, the more power you have (via money). We want to tap into that wealth/power for the greater good. Those affected might disagree and can wield said power to prevent you from doing so. You might be able to legally force them to using the power of democracy, but this could cause all sorts of other problems (the rich fleeing to other countries, etc.)
- maccio92 8y ago
  Because if I'm able to make myself sufficiently wealthy, I should be trusted to handle my money myself, not have it redistributed by some third party that doesn't always operate very efficiently.
  - tashoecraft 8y ago
    This isn't about trust, no one cares whether a rich person can handle their money. That's not why they pay taxes or that those who aren't super rich pay taxes because they can't be trusted. It's about funding the society that helped enable you to become wealthy. That instead of relying on the christian idea of charity that we instead fund a society that can create a more stable environment.
    - tracker1 8y ago
      And what's so wrong from wanting to support charities that pay for the things you want and care about vs. more money to the militarization of police, or the military industrial complex in general?
      - goalieca 8y ago
        Charities are only needed because the government doesn’t provide the necessary services in those areas. The unfortunate thing with charities is that it’s a whim of the donors what gets covered (1 dollar = 1 vote) and sometimes they are religious (not all inclusive)
bigfartchili 8y ago
I openly admit I am a republican but I have never understood why there are not more tax brackets. A person making 100k per year is not even close to the same as a person making 100m per year but are taxed at the same rate.
- wafflesraccoon 8y ago
  I've never really understood why there are brackets in the first place, can't we just write a function to calculate your taxes based off your total income?
  - noobiemcfoob 8y ago
    Because income tax in the first place is a compromise with people who don't want that system at all. So you get a solution that isn't what anyone wants.
  - LyndsySimon 8y ago
    What we have now is effectively "a function to calculate your taxes based off your total income" - it's just that the function treats different portions of income differently.
  - dragonwriter 8y ago
    > I've never really understood why there are brackets in the first place, can't we just write a function to calculate your taxes based off your total income? You could use a function with a smooth derivative, and since a table is used in application it would have no effect on practical complexity of tax prep, though it would make intuitive grasp even harder (and it's already bad.)
- AnimalMuppet 8y ago
  Hmm. Maybe use a log scale? Every factor of 10 in income, the incremental tax rate goes up a percent or three. If 35% is the top now, and starts at $100K (numbers made up because I refuse to grovel through the IRS code in order to make an HN post), and if the delta is 3% per factor of 10, then we get 38% at $1M, 41% at $10M, 44% at $100M, 47% at $1B (income, per year). I'll stop there, because I'm not sure anyone has ever reported $10B income in one year ever in history. If you made the delta 9%, that would get you 44% at $1M, 53% at 10M, 62% at $100M, and 71% at $1B. This gets you in the neighborhood of Ocasio-Cortez's idea, but without one big step to get you there. (I suspect that it would also raise considerably less money than her plan...)
weberc2 8y ago
I applaud ambitious efforts and I'm open to raising taxes for the very rich (albeit easy for me to say down here in the middle class), but AOC doesn't strike be as competent in the slightest (although as her supporters are so fond of rationalizing, she's not the least competent public official). She has charisma, which is an important leadership quality, but not much else as far as I can tell. Certainly not the person I want leading the charge on climate change.
- AnimalMuppet 8y ago
  Or on tax reform.
- rhegart 8y ago
  I agree with raising taxes, maybe not through income tax as it’s shown it often can decreases revenue and capital flight etc. and I support high brackets in the $10M range and up. Many people think 100k is rich and 400k is extremely rich but taxing that further I’m sure will decrease revenue. I support things like a tax on digital advertising. This is a tax that wouldn’t slow growth or harm the econo,y really and impacts mostly those with extremely high capital investments. Facebook, Google help our economy a lot but they don’t have that many jobs in relation to profits. A 10% tax on digital advertising would eat marginally into their profits but their profits rise 25% a year so not too bad. That would raise around $15-$20B a year by 2020. Imagine how doubling the subsidies for solar and EVs would do for renewables and EVs.
- Daishiman 8y ago
  How relevant is this actually? Legislators make the law but it's the bureaucrats, who are the real specialists in crafting the details of legislation that are actually relevant. Competent politicians aren't competent because they're knowledgeable in every possible topic, but because they surround themselves with subject matter experts.
  - zozbot123 8y ago
    > Competent politicians aren't ... they surround themselves with subject matter experts. ¿Por qué no los dos? Is Ocasio-Cortez surrounding herself with subject-matter experts?
cleansy 8y ago
> Income tax hikes are dead on arrival while Republicans control the Senate and White House. Such a steep increase also isn’t likely to find much support among many congressional Democrats. And rightfully so. When pretty much everyone benefited from lax climate controls and externalities that are not directly included in the price of a product or service, why should only on special group pay for it? If there were a global move towards pricing in climate change into the end price, however that may work, I would strongly suggest that everyone has to pay their share. Or am I missing something here?
- johnny313 8y ago
  > When pretty much everyone benefited from lax climate controls and externalities that are not directly included in the price of a product or service I think the argument would be that the ultra-wealthy benefited more from a carbon-based economy than the average worker, in the form of their accumulated fortune.
  - cleansy 8y ago
    I think that argument is not valid. The "ultra rich" would benefit from any kind of capitalistic economy, they are "ultra rich" because they have more capital than 99.9% ( or whatever) of the population. And most of this fortune stems from having shares in businesses. However, IF we would have taxed the greenhouse gas emissions into every product, maybe not even the middle class would have been able to afford it. But since gas was cheap, a lot of people were able to afford having a car, building houses, getting to their jobs without moving their homes and were able to improve their lives. I do see the point in your argument, I just think it would be a fairer solution to tax everyone for the climate change linear to their consumption.
    - goalieca 8y ago
      Consumption is one way to see it. But if, as you were saying, society benefited a lot from greenhouse gases then perhaps tax those that benefited most from our society :)
AnimalMuppet 8y ago
She cites Lincoln and FDR as evidence that radical ideas can be good ones. But "there have been radical ideas that have been good" does not imply "this radical idea is a good one". Her idea may in fact be good, but on this point, her logic does not work. As for the idea itself: IIRC, there seem to be significant second-order effects that keep the federal government's income at 18-22% of GDP, no matter what the tax rates are. So raising the rates like this may provide significantly less new income than she expects. What's more, if you have a pot of new money, there will be competing ideas for how to spend it. This green initiative may be a good idea. Somebody else may have a good idea - say, Medicare for all. And a different somebody may have another good idea - say, guaranteed basic income. The problem is, even if raising the taxes provides the expected money, the money is only enough for one of these ideas. You can only spend that pot once. But Congress being Congress, they're going to want to spend it three times. (Note well: This specific paragraph is not a criticism of Ocasio-Cortez's idea; it's a criticism of Congress in general.)
- dragonwriter 8y ago
  > She cites Lincoln and FDR as evidence that radical ideas can be good ones. But "there have been radical ideas that have been good" does not imply "this radical idea is a good one". But it does rebut the common line of argument that it is preemptively deployed against, which is “Radical ideas should be rejected as bad merely because they are radical.” > As for the idea itself: IIRC, there seem to be significant second-order effects that keep the federal government's income at 18-22% of GDP, no matter what the tax rates are. So raising the rates like this may provide significantly less new income than she expects. To the extent that revenue seems relatively stable with apparently large changes in rates, I don't think those are “second order effects”, I think that they are coordinated changes to tax policy other than rates. The US doesn't have some kind fof special sui generis immunity to policy changing effective rate of total taxation. Also, US federal tax revenues were 27.1% of GDP in 2017 [0], so the 18-22% range is not only not immutable, but also not what is recently observed. [0] https://www.oecd.org/tax/revenue-statistics-united-states.pdf https://www.oecd.org/tax/revenue-statistics-united-states.pd...
  - 8y ago
sharemywin 8y ago
https://en.wikipedia.org/wiki/Green_New_Deal https://en.wikipedia.org/wiki/Green_New_Deal -- Government-led investment in energy and resource efficiency, as well as reusable energies and microgeneration; --Low-carbon infrastructure redevelopment in order to create jobs; --A directed tax on the profits of oil and gas companies with proceeds being invested in renewable energy and energy efficiency; --Financial incentives for green investment and reduced energy usage, including low interest rates for green investment; --Re-regulation of international finance, including capital controls, and increased scrutiny of financial derivatives - likely along the lines of Basel II; --Curbing corporate tax evasion through compulsory financial reporting and by clamping down on tax havens;
thinkingkong 8y ago
In federal accounting how does one allocate tax revenue to a project? Is it not just a big fungible resource that then gets allocated? To me the funding doesnt seem to be the problem in so much as making tackling climate change and allocating actual dollars.
- AnimalMuppet 8y ago
  Congress at least nominally operates under pay-as-you-go rules. If you're going to propose a new program, you have to propose where the money's going to come from. (I say "at least nominally" because I'm not sure that this actually works as advertised. If it did, the deficit shouldn't increase from one year to another, except perhaps in an economic downturn.)
CWuestefeld 8y ago
Not a word about the logistics of making such a huge change in such a short amount of time? Surely AOC realizes that money isn't the only obstacle, but also replacing an enormous amount of infrastructure. When you think about how ubiquitous our usage of gasoline, home heating oil, CNG for heating and cooking, and on and on, it quickly becomes clear that while finances would be very difficult, that's dwarfed by the amount of physical change that would be required. Start looking at how all the replacement transportation can be put in place 11 years - either getting all cars off the road, and manufacturing new electric ones; or building other mass transit that can serve everyone (and how long does it take to get a train line built these days?). How are we going to find enough building contractors to install electric heat or heat pumps into every house that uses oil or gas, and to build and install electric stoves? And of course there's the upheaval of jobs for all the people in the current industries, and trying to find a place for them in the new industries. Money's not the bottleneck here, we're more constrained by logistics.
- L_Rahman 8y ago
  I'll leave the tax plan aside to respond to this. As slow and creaky as the world is, when a government as powerful as the United States aggressively puts forth a vision for the world the systems of the world bend to make it work. Remember also that the vast majority of logistical challenges with climate change aren't developing new products, but handling coordination problems around deploying existing ones. Things that might happen if America decided to commit seriously to a Green New Deal: - automotive roadmap overhaul to 80% electric drivetrain for all deliveries in the United States by 2030 - tectonic shift in land use around the country to higher density zoning, mass transit, HSR - hundreds of billions of dollars of research to public and private institutions to map all the carbon in our system and the most effective ways to remove it But these are all giant changes. Here are simple ones that are straight up applications of government power: - switch all major urban areas to Tokyo style zoning with property taxes tied to mass transit investment - steep cliff on ICE vehicles delivered in the United States hitting some x00% in 2030 - end all fossil fuel subsidies - move all energy supply to a Texas style market Emergent properties of human behavior responding to incentives would take care of the rest.
throwawaysea 8y ago
https://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_top_rates https://en.wikipedia.org/wiki/Income_tax_in_the_United_State... > During World War I, the top rate rose to 77% and the income threshold to be in this top bracket increased to $1,000,000 (equivalent to $19.6 million[68] in 2018 dollars). > During 1944 and 1945, the top rate was its all-time high at 94% applied to income above $200,000 (equivalent to $2.85 million[68] in 2018 dollars). Nominal Tax Rates and Brackets, 1913-2013: https://files.taxfoundation.org/legacy/docs/fed_individual_rate_history_nominal.pdf https://files.taxfoundation.org/legacy/docs/fed_individual_r... Inflation-adjusted Tax Rates and Brackets, 1913-2013 (in 2012 Dollars): https://files.taxfoundation.org/legacy/docs/fed_individual_rate_history_adjusted.pdf https://files.taxfoundation.org/legacy/docs/fed_individual_r...
smadge 8y ago
The US has previously had top marginal income tax rates even higher than 70%. As far as I can tell, currently the highest tax bracket is 37% at income over $600,000. Why not add more brackets with progressively higher rates? The largest barrier is that usually to get elected to to the federal positions that are required to pass this policy you need the support of the donor class, exactly the constituency that would be opposed to the policy.
nonbel 8y ago
I look at these "tax the super-rich" ideas like this: >"Added together, the total net worth for 2018's billionaires was US$9.1 trillion" https://en.wikipedia.org/wiki/The_World%27s_Billionaires https://en.wikipedia.org/wiki/The_World%27s_Billionaires Meanwhile, the US federal government spends ~$4 trillion per year: https://en.wikipedia.org/wiki/United_States_federal_budget#/media/File:CBO_Infographic_2017.png https://en.wikipedia.org/wiki/United_States_federal_budget#/... So even confiscating all the wealth of the top couple thousand richest people in the world (not just US) would only fund the US government for 2-3 years. And that would be a one-time event. Basically, the amount of money spent by the US government is already so massive that I don't see how giving it more can possibly help with anything. It would be much more realistic to attempt making the government slightly more efficient and then reallocating the money saved. And that ignores that barely anyone will end up paying these 90% taxes, just like almost no revenue was collected from the 90% bracket in the 1950s since various accounting methods/etc were be used to avoid it.
- sp332 8y ago
  The US GDP was $17.5 trillion last year. I don't think you're looking at the right numbers. This isn't about seizing wealth, it's just an increase in the top bracket of income taxes. Anyway the climate plan is more about moving money around than just taking it and throwing it in a hole. Ideally, more wealth would be generated from people actually spending the money for useful things than would be made from the passive investments favored by the ultra-rich.
  - nonbel 8y ago
    >"The US GDP was $17.5 trillion last year. I don't think you're looking at the right numbers." I don't follow. Why do you think GDP is the "right number" instead of tax revenue?
    - sp332 8y ago
      You didn't mention tax revenue in your comment either. My point was you need to look at capital gains and business taxes to get an idea of how much money there is available. Wealth is not relevant and personal income is not the whole picture.
chroma 8y ago
Although Ocasio-Cortez minored in economics, she doesn't seem to understand simple concepts such as unemployment rates. In a recent interview[1], in response to a question about how low unemployment rates undermine her message of the working class falling behind, she said the following: > I think the numbers you just talked about is part of the problem. Because we look at these figures and say, "Unemployment is low. Everything is fine." Well unemployment is low because everyone has two jobs. Unemployment is low because people are working 60, 70, 80 hours a week and can barely feed their kids. This was so incorrect that Politifact rated it "pants on fire".[2] AOC also doesn't seem to have an understanding of basic historical facts. Immediately after she put her foot in her mouth on labor stats, she said: > Right now we have this no-holds-barred wild west hypercapitalism. What that means is profit at any cost. Capitalism has not always existed in the world and it will not always exist in the world. When this country started, we were not capitalist. We did not operate on a capitalist economy. That is not the sort of mind that I want tinkering with the economy I am part of. 1. Starting around 5:45 in this video: https://www.pbs.org/video/alexandria-ocasio-cortez-barhhq/ https://www.pbs.org/video/alexandria-ocasio-cortez-barhhq/ 2. https://www.politifact.com/truth-o-meter/statements/2018/jul/18/alexandria-ocasio-cortez/alexandria-ocasio-cortez-wrong-several-counts-abou/ https://www.politifact.com/truth-o-meter/statements/2018/jul...
pmdulaney 8y ago
What if we were to have an amendment to the Constitution such that income taxes for each income group would have to be approved by a plebiscite of those actually IN that income group? I wouldn't feel nearly so uneasy about taxing the ultra-rich at 70% if the majority of them were in favor of it.
- loeg 8y ago
  Might as well just amend the Constitution to forbid raising income taxes.
  - berbec 8y ago
    Didn't work so well for California.
    - dragonwriter 8y ago
      As much as I dislike the supermajority tax rule in CA, it actually hasn't been that much of a practical problem (the supermajority budget rule was, but that was dumped.) Of course, it's not an actual block on tax increases, and there's a straight-to-the-ballot bypass available.
      - berbec 8y ago
        I was referencing the property tax freeze, but I take your point as well.
- dragonwriter 8y ago
  > What if we were to have an amendment to the Constitution such that income taxes for each income group would have to be approved by a plebiscite of those actually IN that income group? Similarly, we should also require that regulations on industry be approved by the regulated industry, and that criminal punishments be ratified by those who are guilty of the specific crime.
  - 8y ago
LyndsySimon 8y ago
Here's what I don't understand - the US emits in the range of 15-20% of the world's total carbon emissions. If we were to reduce that by 20% (which would be a huge undertaking), we're talking about a 4% worldwide decrease at most. In order for any drastic change to happen, the US cannot do it alone. Therefore, domestic policy is not the place where a real impact can be made. It's a foreign policy matter, and something that can really only be accomplished through treaties and the like. China's contribution to carbon emissions is approximately twice the US's. Trump wants to threaten to harm China's economy through tariffs. Why not combine those two goals and craft legislation so that tariffs are set on a sliding scale based on the origin nation's total carbon emissions?
jeffdavis 8y ago
The vast majority of wealth is stored in abstract things like stocks and bonds, not possessions stored in a bunker somewhere. To pay high taxes, that means liquidating those stocks and bonds (or in the case of income taxes, never buying them in the first place). That limits the financing that corporations can get, preventing expansion or causing them to downsize. In other words, taxing the rich actually takes from corporations. Maybe that's the goal, but it has consequences, like job losses, greater dependence on foreign investment and imports, etc.

49 points by rhegart 8y ago

beepboopbeep 8y ago

I would not shed a tear over this.

Justsignedup 8y ago
I think the % of it passing is close to 0 :( but it is a great thought
robotrout 8y ago
The original income tax was also promised to be only a tax on the rich. These things have a way of finding the non-rich eventually. Also, remember in 1970, the bank secrecy act put in place a $10,000 threshold for deposits or withdrawals, that were not reported on a "suspicious activities" list. This is also where we got the $10,000 travel disclosure rule. You will note that in 50 years, that threshold has not budged, putting non-wealthy people and transactions under the microscope. These laws are not adjusted for inflation, and we all expect there to continue to be inflation at the current or even an accelerated rate.
- sharemywin 8y ago
  Most tax brackets are adjusted every couple of years for the average person. doubt it's becomes an issue for tax brackets.

microcolonel 8y ago

"Ultra-Rich" and "Could" are going to have to be refined as ideas; bearing in mind that a) the proportion of GDP which goes to taxes has not changed in any great measure for a very long time, including since the top marginal tax rates were already that high (though the bracket was... pretty high, and other factors reduced its purpose), and b) the U.S. already has the most progressive income taxes in the developed world as far as I can tell. I know it's fashionable these days to play on people's resentment for "the rich" (however that is conveniently defined at the time), but this is budgetary advice from somebody who didn't think far enough ahead to budget her first month of rent in DC (or find a roommate), and who once said that the reason unemployment is low is that "everyone is working two jobs". If you want a progressive policy, this person is not likely to be able to hold that policy's basic premise in her head, let alone any important details. I'm not a progressive, but surely it's easy to see how a Tulsi Gabbard, for example, is actually likely to produce some form of meaningful policy on at least some issues, whereas AOC mostly relies on desperately clawing to relevance through cheap popularity stunts and gaffes.

paulcole 8y ago

Get elected. Say something you know will never happen to excite your base. String them along for years. Get elected again. They said she was an outsider but she sure is learning fast.

lghh 8y ago
So she's just not supposed to start talking about ideas?
- AnimalMuppet 8y ago
  Maybe it would be more useful to talk about ideas that have an actual chance of being enacted.
  - bryanlarsen 8y ago
    She's just reframing the debate. Once people realize how much support there is for a 70% tax bracket at the top, they'll be happy if it's "only" 50%.
    - AnimalMuppet 8y ago
      Hmm. When you put it that way, I seem to recall a certain President Clinton doing something similar, and he was a pretty shrewd politician. Even if you don't scare the top earners into going along, you at least challenge the default of leaving things as they are, and you challenge it in the direction you (the politician) want to go.

gkoberger 8y ago

Agree or disagree, there's a few things this article left unclear. First, the US has a progressive tax code. So, you wouldn't be taxed 70% on your entire income, only the money over a certain amount. Plus, due to deductions and other loopholes, nobody will actually pay this full amount. Secondly, this rate isn't a new idea. It was 94% under FDR (democrat) and 91% during the Eisenhower (republican) administration, and both resulted in times of prosperity. And it was 70% as recently as the 80s.

lghh 8y ago
The first point was mentioned in the article.
- gkoberger 8y ago
  It does include the quote "That doesn’t mean all $10 million are taxed at an extremely high rate", however it wasn't explained for anyone who's unfamiliar with our system.
adventured 8y ago
> and both resulted in times of prosperity Both occurred during (some) times of prosperity. That's an entirely different premise than giving the tax rate credit for the prosperity. FDR never once saw sustained economic prosperity during his tenure in office. That isn't a statement on his policies, rather, his time in office coincided with the great depression and WW2. He died before the post war boom took hold.
antisthenes 8y ago
Did prosperity occur specifically because of the tax rates, or because of unprecedented before scale and use of fossil fuels per capita before the crisis of 1973?

candiodari 8y ago

Man, that article is very light on actual content.

jakelazaroff 8y ago

To put this in context, a 70% rate on the top marginal income tax bracket is not unprecedented, or even high by historical standards [1]: > Sanders said income tax rates under Eisenhower were as high as 90 percent. > A look through the records shows that top earners in the eight years of Eisenhower’s presidency paid a top income tax rate of 91 percent. It was even a bit higher before he took office. > We rate Sanders’ statement True. [1] https://www.politifact.com/truth-o-meter/statements/2015/nov/15/bernie-s/income-tax-rates-were-90-percent-under-eisenhower-/ https://www.politifact.com/truth-o-meter/statements/2015/nov...

kansface 8y ago
> income tax rates under Eisenhower were as high as 90 percent. Climate change is not WWII.
- Daishiman 8y ago
  No, it is actually much, much worse.
- kenforthewin 8y ago
  You're right - the stakes are much higher with climate change.
  - kansface 8y ago
    Sure, but they are not imminent (what is the pearl harbor of climate change?). Further, climate change is highly politicized whereas WWII mobilized the entire country in purpose.
    - InitialLastName 8y ago
      > what is the pearl harbor of climate change? I'd say Katrina, Sandy, Irene, Maria, Camp, Woolsey, and Mendocino, but if you're not convinced already you'll never be.
    - 8y ago

e40 8y ago

70% was the highest tax rate in 1980, so this is not as insane as it might seem on the surface. https://upload.wikimedia.org/wikipedia/commons/8/8c/Historical_Marginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpg https://upload.wikimedia.org/wikipedia/commons/8/8c/Historic...

thatswrong0 8y ago
IIRC the _effective_ tax rates that the top 1% pay haven’t really varied much over the past half a century.. it’s always hovered around 30-40%: https://files.taxfoundation.org/20170804133536/Average-Effective-Tax-Rate-on-the-Top-1-Percent-of-U.S.-Households.png https://files.taxfoundation.org/20170804133536/Average-Effec... Note I just grabbed the first google result, may be inaccurate / biased

umvi 8y ago

Diminishing returns sounds like a good idea on paper, because then the richer you get, the more you contribute. But remember that the people who are experiencing the diminishing returns aren't going to like it (besides Warren Buffett) and will probably fight against it. It's a bit of a conundrum. The richer you get, the more power you have (via money). We want to tap into that wealth/power for the greater good. Those affected might disagree and can wield said power to prevent you from doing so. You might be able to legally force them to using the power of democracy, but this could cause all sorts of other problems (the rich fleeing to other countries, etc.)

maccio92 8y ago
Because if I'm able to make myself sufficiently wealthy, I should be trusted to handle my money myself, not have it redistributed by some third party that doesn't always operate very efficiently.
- tashoecraft 8y ago
  This isn't about trust, no one cares whether a rich person can handle their money. That's not why they pay taxes or that those who aren't super rich pay taxes because they can't be trusted. It's about funding the society that helped enable you to become wealthy. That instead of relying on the christian idea of charity that we instead fund a society that can create a more stable environment.
  - tracker1 8y ago
    And what's so wrong from wanting to support charities that pay for the things you want and care about vs. more money to the militarization of police, or the military industrial complex in general?
    - goalieca 8y ago
      Charities are only needed because the government doesn’t provide the necessary services in those areas. The unfortunate thing with charities is that it’s a whim of the donors what gets covered (1 dollar = 1 vote) and sometimes they are religious (not all inclusive)

bigfartchili 8y ago

I openly admit I am a republican but I have never understood why there are not more tax brackets. A person making 100k per year is not even close to the same as a person making 100m per year but are taxed at the same rate.

wafflesraccoon 8y ago
I've never really understood why there are brackets in the first place, can't we just write a function to calculate your taxes based off your total income?
- noobiemcfoob 8y ago
  Because income tax in the first place is a compromise with people who don't want that system at all. So you get a solution that isn't what anyone wants.
- LyndsySimon 8y ago
  What we have now is effectively "a function to calculate your taxes based off your total income" - it's just that the function treats different portions of income differently.
- dragonwriter 8y ago
  > I've never really understood why there are brackets in the first place, can't we just write a function to calculate your taxes based off your total income? You could use a function with a smooth derivative, and since a table is used in application it would have no effect on practical complexity of tax prep, though it would make intuitive grasp even harder (and it's already bad.)
AnimalMuppet 8y ago
Hmm. Maybe use a log scale? Every factor of 10 in income, the incremental tax rate goes up a percent or three. If 35% is the top now, and starts at $100K (numbers made up because I refuse to grovel through the IRS code in order to make an HN post), and if the delta is 3% per factor of 10, then we get 38% at $1M, 41% at $10M, 44% at $100M, 47% at $1B (income, per year). I'll stop there, because I'm not sure anyone has ever reported $10B income in one year ever in history. If you made the delta 9%, that would get you 44% at $1M, 53% at 10M, 62% at $100M, and 71% at $1B. This gets you in the neighborhood of Ocasio-Cortez's idea, but without one big step to get you there. (I suspect that it would also raise considerably less money than her plan...)

weberc2 8y ago

I applaud ambitious efforts and I'm open to raising taxes for the very rich (albeit easy for me to say down here in the middle class), but AOC doesn't strike be as competent in the slightest (although as her supporters are so fond of rationalizing, she's not the least competent public official). She has charisma, which is an important leadership quality, but not much else as far as I can tell. Certainly not the person I want leading the charge on climate change.

AnimalMuppet 8y ago
Or on tax reform.
rhegart 8y ago
I agree with raising taxes, maybe not through income tax as it’s shown it often can decreases revenue and capital flight etc. and I support high brackets in the $10M range and up. Many people think 100k is rich and 400k is extremely rich but taxing that further I’m sure will decrease revenue. I support things like a tax on digital advertising. This is a tax that wouldn’t slow growth or harm the econo,y really and impacts mostly those with extremely high capital investments. Facebook, Google help our economy a lot but they don’t have that many jobs in relation to profits. A 10% tax on digital advertising would eat marginally into their profits but their profits rise 25% a year so not too bad. That would raise around $15-$20B a year by 2020. Imagine how doubling the subsidies for solar and EVs would do for renewables and EVs.
Daishiman 8y ago
How relevant is this actually? Legislators make the law but it's the bureaucrats, who are the real specialists in crafting the details of legislation that are actually relevant. Competent politicians aren't competent because they're knowledgeable in every possible topic, but because they surround themselves with subject matter experts.
- zozbot123 8y ago
  > Competent politicians aren't ... they surround themselves with subject matter experts. ¿Por qué no los dos? Is Ocasio-Cortez surrounding herself with subject-matter experts?

cleansy 8y ago

> Income tax hikes are dead on arrival while Republicans control the Senate and White House. Such a steep increase also isn’t likely to find much support among many congressional Democrats. And rightfully so. When pretty much everyone benefited from lax climate controls and externalities that are not directly included in the price of a product or service, why should only on special group pay for it? If there were a global move towards pricing in climate change into the end price, however that may work, I would strongly suggest that everyone has to pay their share. Or am I missing something here?

johnny313 8y ago
> When pretty much everyone benefited from lax climate controls and externalities that are not directly included in the price of a product or service I think the argument would be that the ultra-wealthy benefited more from a carbon-based economy than the average worker, in the form of their accumulated fortune.
- cleansy 8y ago
  I think that argument is not valid. The "ultra rich" would benefit from any kind of capitalistic economy, they are "ultra rich" because they have more capital than 99.9% ( or whatever) of the population. And most of this fortune stems from having shares in businesses. However, IF we would have taxed the greenhouse gas emissions into every product, maybe not even the middle class would have been able to afford it. But since gas was cheap, a lot of people were able to afford having a car, building houses, getting to their jobs without moving their homes and were able to improve their lives. I do see the point in your argument, I just think it would be a fairer solution to tax everyone for the climate change linear to their consumption.
  - goalieca 8y ago
    Consumption is one way to see it. But if, as you were saying, society benefited a lot from greenhouse gases then perhaps tax those that benefited most from our society :)

AnimalMuppet 8y ago

She cites Lincoln and FDR as evidence that radical ideas can be good ones. But "there have been radical ideas that have been good" does not imply "this radical idea is a good one". Her idea may in fact be good, but on this point, her logic does not work. As for the idea itself: IIRC, there seem to be significant second-order effects that keep the federal government's income at 18-22% of GDP, no matter what the tax rates are. So raising the rates like this may provide significantly less new income than she expects. What's more, if you have a pot of new money, there will be competing ideas for how to spend it. This green initiative may be a good idea. Somebody else may have a good idea - say, Medicare for all. And a different somebody may have another good idea - say, guaranteed basic income. The problem is, even if raising the taxes provides the expected money, the money is only enough for one of these ideas. You can only spend that pot once. But Congress being Congress, they're going to want to spend it three times. (Note well: This specific paragraph is not a criticism of Ocasio-Cortez's idea; it's a criticism of Congress in general.)

dragonwriter 8y ago
> She cites Lincoln and FDR as evidence that radical ideas can be good ones. But "there have been radical ideas that have been good" does not imply "this radical idea is a good one". But it does rebut the common line of argument that it is preemptively deployed against, which is “Radical ideas should be rejected as bad merely because they are radical.” > As for the idea itself: IIRC, there seem to be significant second-order effects that keep the federal government's income at 18-22% of GDP, no matter what the tax rates are. So raising the rates like this may provide significantly less new income than she expects. To the extent that revenue seems relatively stable with apparently large changes in rates, I don't think those are “second order effects”, I think that they are coordinated changes to tax policy other than rates. The US doesn't have some kind fof special sui generis immunity to policy changing effective rate of total taxation. Also, US federal tax revenues were 27.1% of GDP in 2017 [0], so the 18-22% range is not only not immutable, but also not what is recently observed. [0] https://www.oecd.org/tax/revenue-statistics-united-states.pdf https://www.oecd.org/tax/revenue-statistics-united-states.pd...
- 8y ago

sharemywin 8y ago

https://en.wikipedia.org/wiki/Green_New_Deal https://en.wikipedia.org/wiki/Green_New_Deal -- Government-led investment in energy and resource efficiency, as well as reusable energies and microgeneration; --Low-carbon infrastructure redevelopment in order to create jobs; --A directed tax on the profits of oil and gas companies with proceeds being invested in renewable energy and energy efficiency; --Financial incentives for green investment and reduced energy usage, including low interest rates for green investment; --Re-regulation of international finance, including capital controls, and increased scrutiny of financial derivatives - likely along the lines of Basel II; --Curbing corporate tax evasion through compulsory financial reporting and by clamping down on tax havens;

thinkingkong 8y ago

In federal accounting how does one allocate tax revenue to a project? Is it not just a big fungible resource that then gets allocated? To me the funding doesnt seem to be the problem in so much as making tackling climate change and allocating actual dollars.

AnimalMuppet 8y ago
Congress at least nominally operates under pay-as-you-go rules. If you're going to propose a new program, you have to propose where the money's going to come from. (I say "at least nominally" because I'm not sure that this actually works as advertised. If it did, the deficit shouldn't increase from one year to another, except perhaps in an economic downturn.)

CWuestefeld 8y ago

Not a word about the logistics of making such a huge change in such a short amount of time? Surely AOC realizes that money isn't the only obstacle, but also replacing an enormous amount of infrastructure. When you think about how ubiquitous our usage of gasoline, home heating oil, CNG for heating and cooking, and on and on, it quickly becomes clear that while finances would be very difficult, that's dwarfed by the amount of physical change that would be required. Start looking at how all the replacement transportation can be put in place 11 years - either getting all cars off the road, and manufacturing new electric ones; or building other mass transit that can serve everyone (and how long does it take to get a train line built these days?). How are we going to find enough building contractors to install electric heat or heat pumps into every house that uses oil or gas, and to build and install electric stoves? And of course there's the upheaval of jobs for all the people in the current industries, and trying to find a place for them in the new industries. Money's not the bottleneck here, we're more constrained by logistics.

L_Rahman 8y ago
I'll leave the tax plan aside to respond to this. As slow and creaky as the world is, when a government as powerful as the United States aggressively puts forth a vision for the world the systems of the world bend to make it work. Remember also that the vast majority of logistical challenges with climate change aren't developing new products, but handling coordination problems around deploying existing ones. Things that might happen if America decided to commit seriously to a Green New Deal: - automotive roadmap overhaul to 80% electric drivetrain for all deliveries in the United States by 2030 - tectonic shift in land use around the country to higher density zoning, mass transit, HSR - hundreds of billions of dollars of research to public and private institutions to map all the carbon in our system and the most effective ways to remove it But these are all giant changes. Here are simple ones that are straight up applications of government power: - switch all major urban areas to Tokyo style zoning with property taxes tied to mass transit investment - steep cliff on ICE vehicles delivered in the United States hitting some x00% in 2030 - end all fossil fuel subsidies - move all energy supply to a Texas style market Emergent properties of human behavior responding to incentives would take care of the rest.

throwawaysea 8y ago

https://en.wikipedia.org/wiki/Income_tax_in_the_United_States#History_of_top_rates https://en.wikipedia.org/wiki/Income_tax_in_the_United_State... > During World War I, the top rate rose to 77% and the income threshold to be in this top bracket increased to $1,000,000 (equivalent to $19.6 million[68] in 2018 dollars). > During 1944 and 1945, the top rate was its all-time high at 94% applied to income above $200,000 (equivalent to $2.85 million[68] in 2018 dollars). Nominal Tax Rates and Brackets, 1913-2013: https://files.taxfoundation.org/legacy/docs/fed_individual_rate_history_nominal.pdf https://files.taxfoundation.org/legacy/docs/fed_individual_r... Inflation-adjusted Tax Rates and Brackets, 1913-2013 (in 2012 Dollars): https://files.taxfoundation.org/legacy/docs/fed_individual_rate_history_adjusted.pdf https://files.taxfoundation.org/legacy/docs/fed_individual_r...

smadge 8y ago

The US has previously had top marginal income tax rates even higher than 70%. As far as I can tell, currently the highest tax bracket is 37% at income over $600,000. Why not add more brackets with progressively higher rates? The largest barrier is that usually to get elected to to the federal positions that are required to pass this policy you need the support of the donor class, exactly the constituency that would be opposed to the policy.

nonbel 8y ago

I look at these "tax the super-rich" ideas like this: >"Added together, the total net worth for 2018's billionaires was US$9.1 trillion" https://en.wikipedia.org/wiki/The_World%27s_Billionaires https://en.wikipedia.org/wiki/The_World%27s_Billionaires Meanwhile, the US federal government spends ~$4 trillion per year: https://en.wikipedia.org/wiki/United_States_federal_budget#/media/File:CBO_Infographic_2017.png https://en.wikipedia.org/wiki/United_States_federal_budget#/... So even confiscating all the wealth of the top couple thousand richest people in the world (not just US) would only fund the US government for 2-3 years. And that would be a one-time event. Basically, the amount of money spent by the US government is already so massive that I don't see how giving it more can possibly help with anything. It would be much more realistic to attempt making the government slightly more efficient and then reallocating the money saved. And that ignores that barely anyone will end up paying these 90% taxes, just like almost no revenue was collected from the 90% bracket in the 1950s since various accounting methods/etc were be used to avoid it.

sp332 8y ago
The US GDP was $17.5 trillion last year. I don't think you're looking at the right numbers. This isn't about seizing wealth, it's just an increase in the top bracket of income taxes. Anyway the climate plan is more about moving money around than just taking it and throwing it in a hole. Ideally, more wealth would be generated from people actually spending the money for useful things than would be made from the passive investments favored by the ultra-rich.
- nonbel 8y ago
  >"The US GDP was $17.5 trillion last year. I don't think you're looking at the right numbers." I don't follow. Why do you think GDP is the "right number" instead of tax revenue?
  - sp332 8y ago
    You didn't mention tax revenue in your comment either. My point was you need to look at capital gains and business taxes to get an idea of how much money there is available. Wealth is not relevant and personal income is not the whole picture.

chroma 8y ago

Although Ocasio-Cortez minored in economics, she doesn't seem to understand simple concepts such as unemployment rates. In a recent interview[1], in response to a question about how low unemployment rates undermine her message of the working class falling behind, she said the following: > I think the numbers you just talked about is part of the problem. Because we look at these figures and say, "Unemployment is low. Everything is fine." Well unemployment is low because everyone has two jobs. Unemployment is low because people are working 60, 70, 80 hours a week and can barely feed their kids. This was so incorrect that Politifact rated it "pants on fire".[2] AOC also doesn't seem to have an understanding of basic historical facts. Immediately after she put her foot in her mouth on labor stats, she said: > Right now we have this no-holds-barred wild west hypercapitalism. What that means is profit at any cost. Capitalism has not always existed in the world and it will not always exist in the world. When this country started, we were not capitalist. We did not operate on a capitalist economy. That is not the sort of mind that I want tinkering with the economy I am part of. 1. Starting around 5:45 in this video: https://www.pbs.org/video/alexandria-ocasio-cortez-barhhq/ https://www.pbs.org/video/alexandria-ocasio-cortez-barhhq/ 2. https://www.politifact.com/truth-o-meter/statements/2018/jul/18/alexandria-ocasio-cortez/alexandria-ocasio-cortez-wrong-several-counts-abou/ https://www.politifact.com/truth-o-meter/statements/2018/jul...

pmdulaney 8y ago

What if we were to have an amendment to the Constitution such that income taxes for each income group would have to be approved by a plebiscite of those actually IN that income group? I wouldn't feel nearly so uneasy about taxing the ultra-rich at 70% if the majority of them were in favor of it.

loeg 8y ago
Might as well just amend the Constitution to forbid raising income taxes.
- berbec 8y ago
  Didn't work so well for California.
  - dragonwriter 8y ago
    As much as I dislike the supermajority tax rule in CA, it actually hasn't been that much of a practical problem (the supermajority budget rule was, but that was dumped.) Of course, it's not an actual block on tax increases, and there's a straight-to-the-ballot bypass available.
    - berbec 8y ago
      I was referencing the property tax freeze, but I take your point as well.
dragonwriter 8y ago
> What if we were to have an amendment to the Constitution such that income taxes for each income group would have to be approved by a plebiscite of those actually IN that income group? Similarly, we should also require that regulations on industry be approved by the regulated industry, and that criminal punishments be ratified by those who are guilty of the specific crime.
- 8y ago

LyndsySimon 8y ago

Here's what I don't understand - the US emits in the range of 15-20% of the world's total carbon emissions. If we were to reduce that by 20% (which would be a huge undertaking), we're talking about a 4% worldwide decrease at most. In order for any drastic change to happen, the US cannot do it alone. Therefore, domestic policy is not the place where a real impact can be made. It's a foreign policy matter, and something that can really only be accomplished through treaties and the like. China's contribution to carbon emissions is approximately twice the US's. Trump wants to threaten to harm China's economy through tariffs. Why not combine those two goals and craft legislation so that tariffs are set on a sliding scale based on the origin nation's total carbon emissions?

jeffdavis 8y ago

The vast majority of wealth is stored in abstract things like stocks and bonds, not possessions stored in a bunker somewhere. To pay high taxes, that means liquidating those stocks and bonds (or in the case of income taxes, never buying them in the first place). That limits the financing that corporations can get, preventing expansion or causing them to downsize. In other words, taxing the rich actually takes from corporations. Maybe that's the goal, but it has consequences, like job losses, greater dependence on foreign investment and imports, etc.