Fri, Jan 11, 2019 - Page 9 News List

Representative punts ‘radical’ US tax strategy

Nobel Prize winner Paul Krugman has backed Alexandria Ocasio-Cortez’s idea to tax the rich up to 70%, saying that it is in line with what good economists believe

By Lucie Aubourg  /  AFP, WASHINGTON

US Representative Alexandria Ocasio-Cortez began her term as the youngest woman ever elected to the US Congress with a bang this week by proposing to tax the ultra-rich at 60 or 70 percent.

The daughter of hardscrabble working-class parents, the 29-year-old New Yorker was working toward making good on a campaign promise.

“People are going to have to pay their fair share of taxes,” she told CBS television’s 60 Minutes on Sunday.

The proposal is part of an ambitious tax plan dubbed the Green New Deal, which aims to eliminate carbon emissions by 2030.

The self-described Democratic Socialist, nicknamed AOC, suggested taxing the ultra-wealthy up to 70 percent to finance the plan.

“You look at our tax rates back in the 60s, and when you have a progressive tax rate system, your tax rate, let’s say, from zero to US$75,000 may be 10 percent or 15 percent, et cetera, but once you get to, like, the tippy tops, on your 10 millionth dollar, sometimes you see tax rates as high as 60 or 70 percent,” Ocasio-Cortez said.

“That doesn’t mean all US$10 million are taxed at an extremely high rate, but it means that as you climb up this ladder you should be contributing more,” she said.

The top marginal tax rate is now 37 percent, following US President Donald Trump’s fiscal reforms. It was previously 39.6 percent.

Even though it has little chance of success, the proposal backed by the young lawmaker has already garnered significant support.

It landed her on the front page of the New York Daily News, an image of which Ocasio-Cortez was quick to retweet.

A Washington Post analysis found that if the approximately 16,000 Americans who earn more than US$10 million each paid 70 percent income taxes for any revenue above that marker, the federal government would rake in about US$72 billion per year.

However, the sum would likely be much lower, because individuals falling in that bracket would find ways to avoid the heavy tax burden.

In a New York Times op-ed, Nobel Prize-winning economist Paul Krugman backed Ocasio-Cortez, rejecting “the constant effort to portray her as flaky and ignorant.”

“On the tax issue, she’s just saying what good economists say,” he said.

Ocasio-Cortez’s surprise victory during Democratic primaries in June over Joseph Crowley has made her a key figure of the liberal wing of the party. Crowley had run unopposed for more than a decade and was seen as a contender to become the next speaker of the US House of Representatives.

Ocasio-Cortez rarely attacks US President Donald Trump — but when questioned, she told CBS there was “no question” that he was a racist.

“The president certainly didn’t invent racism, but he’s certainly given a voice to it and expanded it, and created a platform for those things,” she said.

In response, the White House told CBS that Trump has “repeatedly condemned racism and bigotry in all forms,” dismissing Ocasio-Cortez’s “sheer ignorance.”

However, the 29-year-old is no stranger to criticism — and has repeatedly demonstrated that she can respond swiftly to her detractors.

To suggestions that her proposals are unrealistic, she told CBS: “We pay more per capita in healthcare and education for lower outcomes than many other nations, and so for me, what’s unrealistic is what we’re living in right now.”

When Republican campaign consultant Ed Rollins called her a “little girl” on a conservative television talk show, Ocasio-Cortez shot back on Twitter: “If anything, this dude is a walking argument to tax misogyny at 100%.”

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