Posted by 07 January 2019
She’s only a freshman member of Congress, but Rep. Alexandria Ocasio-Cortez is already spurring a national debate over tax rates and environmental spending. Rep. Ocasio-Cortez recently proposed increasing the top marginal tax rate to 70% in order to pay for a variety of environmental programs known as the “Green New Deal.”
While there is no formal proposal, this Green New Deal is a concept that has been discussed over the past few years in liberal and progressive circles. Rep. Ocasio-Cortez is supporting a plan that would transition the U.S. to an economy that stops using carbon-based energy (such as oil, natural gas, and coal), spend trillions of dollars, guarantees federal jobs, and addresses inequality. These are goals, not policy proposals. She has called for House leadership to form a select committee to study the issue and develop legislation.
In order to pay for this plan, Rep. Ocasio-Cortez has said that the tax rates on wealthy individuals should be increased to 70%. She has floated the idea that on income of $10 million or above, that this rate should apply. She argues that marginal tax rates in the past were much higher, so this idea has already been tried. In her view, the wealthy should pay their “fair share,” which means taxing $10 million in income at a much higher rate than it is taxed today.
This idea was immediately attacked by critics who said that it would be a massive tax hike, putting the U.S. rates far above other nations’ tax rates. This would discourage work and encourage tax avoidance. These critics pointed out that while high marginal tax rates existed in the past, there were also many more loopholes for high-income taxpayers.
Rep. Ocasio-Cortez has also said that taxes may not need to be raised to pay for environmental programs. She argues that other measures, such as tax cuts and military spending increases, are paid for by deficit spending, so the Green New Deal could be funded in that way, too.
Do you support increasing the tax rate to 70% on incomes over $10 million? Should the federal government spend trillions of dollars on new environmental programs?