Alexandria Ocasio-Cortez's plan to tax the wealthiest Americans 60-70% could bring in billions of extra dollars for the federal government

Alexandria Ocasio-Cortez 2018Alexandria Ocasio-Cortez.
  • Rep. Alexandria Ocasio-Cortez of New York has touted a plan that would tax the richest Americans at a rate as high as 70%.
  • She said the additional funds from the taxes would contribute to a massive overhaul plan to lower the country’s carbon emissions to zero and eliminate fossil fuels in 10 years.
  • The newly elected lawmaker has been criticised for her proposed marginal income tax rate, which she said would affect Americans making more than $US10 million a year.

Rep. Alexandria Ocasio-Cortez has touted a marginal income tax rate of 60% to 70% for multimillionaire Americans to fund massive energy and infrastructure overhauls in a plan to lower the country’s carbon emissions to zero and eliminate fossil fuels in 10 years.

The New York representative said in a “60 Minutes” interview set to air Sunday that the new marginal tax rate would affect Americans making more than $US10 million to help pay for the “Green New Deal.

“Once you get to the tippy-tops, on your 10 millionth dollar, sometimes you see tax rates as high as 60% or 70%,” Ocasio-Cortez said. “That doesn’t mean all 10 million dollars are taxed at an extremely high rate. But it means that as you climb up this ladder, you should be contributing more.”

Ocasio-Cortez pointed to past administrations – both Republican and Democratic – that implemented similar rates.

The top marginal tax rate reached 91% in the 1950s, under President Dwight D. Eisenhower. After the administration of President John F. Kennedy, and under President Lyndon B. Johnson, the rate sat at 70%. President Ronald Reagan then sliced the top rate to 50% in the early 1980s before it fell to 38.5% in 1986.

An analysis by The Washington Post found that if taxes on the approximately 16,000 Americans who earned more than $US10 million in 2016 were raised to 70% from the 39.6% they paid that year, the federal government would bring in an extra $US72 billion each year.

That would be enough to tackle other moves touted by Ocasio-Cortez, including forgiving half of the $US1.4 trillion in student-loan debt in the US.

Read more: This is the platform that launched Alexandria Ocasio-Cortez, a 29-year-old democratic socialist, to become the youngest woman ever elected to Congress

Critics targeted the plan’s steep top figure of 70%. Ocasio-Cortez tangled with House Minority Whip Steve Scalise on Twitter on Saturday, suggesting he didn’t know “how marginal tax rates work.”

Though she hasn’t specified a cost for the plan, Ocasio-Cortez has described the Green New Deal as an ambitious, all-encompassing movement toward cleaner energy across the country.

“The Green New Deal we are proposing will be similar in scale to the mobilization efforts seen in World War II or the Marshall Plan,” she told HuffPost last year. “We must again invest in the development, manufacturing, deployment, and distribution of energy, but this time green energy.”

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