Paul L. Caron

Wednesday, January 23, 2019

Saez & Zucman: Alexandria Ocasio-Cortez's 70% Top Tax Rate Would Curtail Inequality And Save Democracy

Following up on Sunday's post, Alexandria Ocasio-Cortez's Proposed 70% Top Tax Rate:  New York Times op-ed:  Alexandria Ocasio-Cortez’s Tax Hike Idea Is Not About Soaking the Rich—It’s About Curtailing Inequality and Saving Democracy, by Emmanuel Saez (UC-Berkeley) & Gabriel Zucman (UC-Berkeley):

Alexandria Ocasio-Cortez has kick-started a much-needed debate about taxes. But the debate, so far, has been misplaced. It’s obvious that the affluent — who’ve seen their earnings boom since 1980 while their taxes fell — can contribute more to the public coffers. And given the revenue needs of the country, it is necessary.

But that’s not the fundamental reason higher top marginal income tax rates are desirable. Their root justification is not about collecting revenue. It is about regulating inequality and the market economy. It is also about safeguarding democracy against oligarchy. ...

Just as the point of taxing carbon is not to raise revenue but to reduce carbon emissions, high tax rates for sky-high incomes do not aim at funding Medicare for All. They aim at preventing an oligarchic drift that, if left unaddressed, will continue undermining the social compact and risk killing democracy.

Progressive income taxation cannot solve all our injustices. But if history is any guide, it can help stir the country in the right direction, closer to Japan and farther from Putin’s Russia. Democracy or plutocracy: That is, fundamentally, what top tax rates are about.

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@ Dale - of course! It's how they want to get rid of "inequality."

Posted by: Anon | Jan 26, 2019 11:02:52 AM

The carbon tax analogy proves the wrong point. If you want less of something, tax it. Are the authors saying they want less income?

Posted by: Dale Spradling | Jan 26, 2019 10:09:23 AM

The full article contains this statement: "From the 1930s to the 1980s, the United States came as close as any democratic country ever did to imposing a legal maximum income. The inequality of pretax income shrank dramatically."

Fair enough. All the same, I'm not particularly interested in any limits on pretax income. I'm hugely interested in fair, progressive taxation on all income: reductions in post-tax income inequality, not in pre-tax income inequality.

President Obama made progress in this direction by the tax hikes on higher-income taxpayers that were passed during his Administration. The same would happen if Ocasio-Cortez's higher marginal rates should come to pass.

Posted by: Gerald Scorse | Jan 23, 2019 5:55:33 AM

I think ACO is an attention-getter. To finance a welfare state one needs higher taxes on the middle and upper middle class. High tax rates on a few billionaires are mostly symbolic and probably rather easily avoidable

Posted by: Mike Livingston | Jan 23, 2019 4:15:52 AM

Socialist nonsense signals the descent of democracy into anarchy.

Posted by: ruralcounsel | Jan 23, 2019 3:54:36 AM